The  Canal  Tolls 

and 

American  Shipping 


ewis    Nixon 


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in  2007  with  funding  from 

Microsoft  Corporation 


http://www.archive.org/details/canaltollsamericOOnixorich 


THE  CANAL  TOLLS  AND 
AMEEICAN  SHIPPING 


THE  CANAL  TOLLS 

AND 

AMERICAN  SHIPPING 


BY 


LEWIS   NIXON 


NEW  YORK 

McBRIDE,  NAST  &  COMPANY 

1914 


COPYRIGHT,   1914,    BY 
McBride,  Nast  &  Co. 


Published    May,    IQ14 


FOREWORD 

It  is  proposed  in  this  book  to  submit  to  an 
impartial  examination  the  different  interpreta- 
tions of  the  meaning  of  the  Hay-Pauncefote 
Treaty.  Lest  the  writer's  long  association  with 
American  shipping  interests  may  seem  to  militate 
against  a  detachment  from  personal  bias  in  this 
discussion,  he  deems  it  wise  to  add  that  he  is  no 
longer  engaged  in  shipbuilding,  nor  has  he  any 
interest  direct  or  indirect  in  any  vessel  engaged 
in  the  foreign  or  coasting  trade  of  the  United 
States. 

Finding  many  arguments  advanced  upon  ideas 
gathered  from  hasty  consideration  which  had  not 
taken  in  both  sides  of  the  question,  it  was  decided 
to  try  to  put  within  these  brief  limits  a  general 
analysis  of  the  Treaty's  provisions,  to  review  both 
sides  of  the  controversy  and  to  give  furthermore 
all  the  state  papers  that  show  the  development  of 
the  Treaty. 

If  the  reading  of  this  book  adds  to  the  general 
information  of  the  ordinary  reader  without  time 
for  exhaustive  study  and  enables  him  to  criticise 
with  confidence  the  many  addresses  and  papers  on 
the  subject  I  shall  feel  that  it  has  served  the  pur- 
pose of  its  inspiration. 


286683 


Foreword 

There  seems  to  be  an  impression  that  the  con- 
tention respecting  the  right  of  the  United  States 
to  remit  toll  charges  on  its  own  vessels  is  an 
academic  question,  and  that  such  contention  is 
simply  a  battle  of  wits.  As  a  fact  it  is  the  most 
serious  determination  that  has  been  asked  of  our 
people  for  half  a  century. 

Our  foreign  trade  is  in  the  hands  of  our  com- 
mercial rivals  and  if  the  Panama  Canal  policy  is 
not  determined  aright  it  will  remain  there  with 
ever  strengthening  control. 

Some  of  our  people  upon  hearsay,  others  upon 
blind  acceptance  of  the  opinions  of  others,  owing 
to  the  fact  that  treaties  were  not  available,  have 
developed  a  state  of  mind  in  which  an  insistence 
upon  secure,  moral  and  legal  rights  is  viewed  as  a 
breach  of  treaty  faith. 

Lewis  Nixon. 

New  York, 
7  April,  1914. 


CONTENTS 

CHAPTER  PAGE 

I    Preliminary  Steps 1 

II    The    Clayton-Bulwer    Convention    ....     11 

III  Neutrality  and  Equal  Treatment  and  the  Suez 

Rules 24 

IV  The     Negotiation     of     the     Hay-Pauncefote 

Treaty 45 

V    Insincerities 70 

VI    The  Speech  of  Senator  Elihu  Root  ....  76 

VII    The    British    Protest 88 

VIII    Regulation  of  Commerce 92 

APPENDICES 

The  Clayton-Bulwer  Convention 101 

The   Hay-Pauncefote   Treaty 106 

The    Hay-Bunau-Varilla    Treaty 109 

The  Suez  Canal  Convention 122 

Negotiation  of  the  Hay-Pauncefote  Treaty   (Cor- 
respondence)          127 

First  British  Protest 173 

Second  British  Protest 175 

Reply  of  Secretary  of  State  Knox 188 

President  TaiVs  Memorandum  to  Accompany  the 

Panama  Canal  Act 197 

Speech  of  Senator  Elihu  Root 206 

Platform   Declarations 238 

Treaty  of  1846 239 

President  Wilson's  Message 241 

Panama  Canal  Act 242 


THE  CANAL  TOLLS  AND 
AMERICAN  SHIPPING 


THE  CANAL  TOLLS  AND 
AMERICAN  SHIPPING 

CHAPTER  I 
PRELIMINARY  STEPS 

Even    Columbus   hoped   to   discover   a   strait 
between  the  North  and  South  American  Conti- 
nents.    The    question    of    cutting    through    the 
Isthmus  we  find  referred  to  many  times  from  1502  * 
to  recent  years. 

In  1826  Secretary  of  State,  Henry  Clay,  wrote 
to  Messrs.  Anderson  and  Sergea/it,  United  States 
delegates  to  the  Panama  Congress,  advising  the 
consideration  by  that  Congress  of  the  matter  \pi  p 
canal. 

In  1835  the  Senate  adopted  a  resolution  request- 
ing the  President  to  consider  the  expediency  of 
opening  negotiations  with  the  governments  of 
other  nations,  especially  with  those  of  Central 
America  and  New  Grenada,  with  a  view  to  safe- 
guarding individuals  or  companies  that  might  un- 
dertake to  build  a  canal  across  the  Isthmus.  In 
1839  the  House  of  Kepresentatives  took  action 
along  similar  lines  in  response  to  a  memorial  from 
New  York  merchants. 

l 


2      Canal  Tolls  and  American  Shipping 

On  February  10,  1847,  President  Polk  transmit- 
ted with  message  to  the  Senate  for  ratification  "A 
general  treaty  of  peace,  amity,  navigation  and 
commerce  between  the  United  States  and  the  Re- 
public of  New  Grenada/ y  concluded  at  Bogota, 
December  12, 1846.  Under  this  treaty  of  1846,  the 
citizens,  vessels  and  merchandise  of  the  United 
States  were  to  have  reciprocal  treatment  with 
those  of  New  Grenada  in  passage  across  any  part 
of  Panama,  besides  being  relieved  from  any  im- 
port duties  on  goods  in  transit.  This  in  return 
for  the  positive  and  efficacious  guarantee  of  the 
neutrality  of  the  Isthmus — as  well  as  the  rights 
of  sovereignty  and  property  over  it. 

The  Panama  Railway  completed  in  1855  was  an 
outcome  of  this  treaty. 

The  American  and  Atlantic  Ship  Canal  Com- 
pany executed  a  contract  with  the  Government  of 
Nicaragua  August  27, 1849. 

Mr.  Squier,  United  States  Charge  d'affaires, 
concluded  a  treaty  ceding  Tigre  Island  in  the  Gulf 
of  Fonseca  to  the  United  States.  On  October  16, 
1849,  the  British  Diplomatic  representative  to 
Guatemala,  Mr.  Chatfield,  with  an  armed  force 
took  possession  of  Tigre  Island.  Possession  at 
that  time  would  have  meant  war  with  Great 
Britain.  We  were  in  the  midst  of  the  bitter  dis- 
cussions leading  up  to  our  Civil  War  and  had  we 
gone  to  war  with  Great  Britain  very  probably  the 
Civil  War  would  have  been  precipitated  with  the 
Southern    States    as    possible    allies    of    Great 


Preliminary  Steps  3 

Britain.  The  conversion  of  English  lumber  camps 
on  the  eastern  coast  of  Nicaragua  and  Honduras 
into  what  was  practically  British  territory, 
through  virtue  of  occupation  in  anticipation  of  the 
building  of  a  canal,  was  considered  by  American 
statesmen  of  the  period  as  equivalent  to  a  virtual 
abandonment  of  the  Monroe  Doctrine. 

In  1848,  England  seized  and  occupied  Grey- 
town  till  1860  under  the  mask  of  aiding  the  Mos- 
quito Indians,  even  crowning  an  Indian  King  as  a 
"cousin"  and  "great  and  good  friend"  of  Euro- 
pean sovereigns.  The  salary  of  the  king  was 
£1000  a  year  till  he  died  in  1864.  Just  so  long  as 
England  considered  it  necessary  she  maintained 
the  protectorate  over  the  Mosquito  Beservation, 
getting  the  Austrian  Emperor  to  bolster  up  her 
claims  in  1880,  and  it  was  not  till  1894  that  the 
Mosquito  Coast  was  turned  over  to  Nicaragua  and 
until  work  under  Menocal  on  the  Nicaragua  Canal, 
which  was  carried  on  in  1891  and  1892,  was  aban- 
doned. 

So  our  Government  was  driven  to  execute  a 
treaty  which  violated  the  intent  of  the  Monroe 
Doctrine.  Just  as  one  of  the  results  of  the  Busso- 
Turkish  "War  was  to  give  England  control  of 
Cyprus,  with  the  right  to  occupy  territory  near 
the  Canal  in  British  interests,  and  in  Central 
America,  though  agreeing  not  to  fortify  or  set- 
tle, (in  Article  I  of  the  Clayton-Bulwer  Treaty)  we 
find  her  holding  fast  to  the  Mosquito  Coast  until 
1894  and  to  Belize  to  the  present  day.    While 


4      Canal  Tolls  and  American  Shipping 

Great  Britain  engaged  by  treaty  to  vacate  the 
coast  she  violated  this  treaty  in  letter  and  spirit. 
President  Pierce,  in  a  message  in  1856,  said : 

It  is  with  surprise  and  regret  that  the  United  States 
learned  that  a  military  expedition  under  the  authority 
of  the  British  Government  had  landed  at  San  Juan  del 
Norte,  in  the  State  of  Nicaragua,  and  taken  forcible 
possession  of  that  port,  the  necessary  terminus  of  any 
canal  across  the  Isthmus  within  the  territories  of  Nica- 
ragua. It  did  not  diminish  to  us  the  unwelcomeness  of 
this  act  on  the  part  of  Great  Britain  to  find  that  she 
assumed  to  justify  it  on  the  ground  of  an  alleged  pro- 
tectorship of  a  small  and  obscure  band  of  uncivilized 
Indians  whose  proper  name  had  even  been  lost  to  his- 
tory, who  did  not  constitute  a  State  capable  of  terri- 
torial sovereignty  either  in  fact  or  in  right,  and  all 
political  interests  in  whom  and  in  the  territory  they 
occupied  Great  Britain  had  previously  renounced  by 
successive  treaties  with  Spain  when  Spain  was  sovereign 
to  the  country  and  subsequently  with  independent  Span- 
ish America. 

The  following  proclamation  is  another  violation 
of  treaty  rights. 

Office  of  the  Colonial  Secretary. 

Belire,  July  17,  1852. 
This  is  to  give  notice  that  Her  Most  Gracious  Majesty 
the  Queen  has  been  pleased  to  constitute  and  make  the 
Island  of  Roatan,  Bonacca,  Utilla,  Barbarat,  Helene  and 
Morat  to  be  a  Colony  to  be  known  and  designated  as  the 
Colony  of  the  Bay  Islands. 

Augustus  Frederick  Gare, 
Acting  Colonial  Secretary. 


Preliminary  Steps  5 

Eoatan  was  one  of  the  "islands  adjacent' '  to 
the  American  Continent  that  had  been  restored  by 
Great  Britain  to  Spain  under  treaties  of  1783  and 
1786. 

Mr.  Marcy,  Secretary  of  State,  informed  the 
United  States  Minister  to  Great  Britain,  July  26, 
1856,  as  to  the  view  taken  by  the  United  States 
saying: 

Great  Britain  had  not  at  the  time  of  the  Convention 
of  April  19,  1850,  any  rightful  possessions  in  Central 
America,  save  only  the  usufructuary  settlement  at  Be- 
lire,  if  that  really  be  in  Central  America,  and  at  the 
same  time  if  she  had  any  she  was  bound  by  the  express 
tenor  and  true  construction  of  the  convention,  to  evac- 
uate the  same  and  thus  to  stand  on  precisely  the  same 
footing  in  that  respect  as  the  United  States. 

The  Dallas  Clarendon  Treaty  of  1854,  stating 
explicitly  that  the  protectorate  over  the  Mosquito 
Indians  and  continued  possession  of  the  Bay 
Islands  would  be  terminated,  was  refused  by  Great 
Britain. 

At  any  rate  it  is  known  that  there  was  much 
misunderstanding  preceding  1850  and  alarm  over 
acts  of  British  aggression.  Mr.  Lawrence,  our 
Minister  in  London,  making  but  little  progress 
owing  to  the  evasive  policy  of  Great  Britain,  Mr. 
Clayton,  Secretary  of  State,  signed  a  convention 
in  Washington  directly  with  Sir  Henry  Bulwer. 
This  treaty  was  ratified  July  5, 1850,  and  is  known 
as  the  Clayton-Bulwer  Convention.    While  Great 


6      Canal  Tolls  and  American  Shipping 

Britain  made  sure  of  land  near  to  and  command- 
ing the  entrance  of  any  Nicaraguan  Canal,  there 
can  be  no  question  but  the  English  statesmen  of 
the  day  fully  appreciated  the  strength  of  the 
New  Grenada  Treaty  of  1846. 

The  wording  of  the  eighth  article  of  the  Clay- 
ton-Bulwer  Convention,  the  extension  by  treaty 
stipulation  of  protection,  was  to  secure  certain  like 
terms  of  treatment  over  other  routes.  So  from 
1850  to  1901  we  find  every  form  of  diplomatic 
strategy  exerted  to  extend  such  treaty  stipulations 
and  so  enjoy  equal  terms  with  the  United  States. 

The  Treaty  of  1846  gave  reciprocal  rights  to  the 
United  States  and  before  the  provisions  of  the 
Clayton-Bulwer  Convention  could  be  extended  to 
the  Isthmus  of  Panama  very  material  modifica- 
tions must  have  been  made  in  the  Treaty  of  1846 
and  this  could  not  be  done  without  the  consent  of 
New  Grenada. 

In  fact  the  Treaty  of  1846  with  New  Grenada 
stood  in  the  way  of  the  equal  treatment  guaranteed 
in  the  superseded  Clayton-Bulwer  Treaty,  as  it 
extended  certain  privileges  in  Panama  to  the 
United  States  by  virtue  of  our  giving  reciprocal 
conditions  of  treatment  in  Panama  itself.  It  is  an 
accepted  principle  in  international  law  that  fa- 
vored nation  treaties  do  not  preclude  the  extend- 
ing of  a  special  privilege  to  another  nation  pro- 
vided a  reciprocal  privilege  is  secured  in  return. 
Thus  the  United  States  negotiated  a  commercial 
treaty  with  the  Sandwich  Islands  in  1876,  pro- 


Preliminary  Steps  7 

viding  for  certain  reciprocal  trade  concessions. 
The  British  Government  made  the  following 
comment  thereon : 

As  the  advantages  conceded  to  the  United  States  by 
the  Sandwich  Islands  are  expressly  stated  to  be  given 
in  consideration  of  and  as  an  equivalent  for  certain 
reciprocal  concessions  on  the  part  of  the  United  States, 
Great  Britain  cannot,  as  a  matter  of  right,  claim  the 
same  advantages  for  her  trade  under  the  strict  letter 
of  the  Treaty  of  1851. 

Evidently  Senator  Root's  conclusions  are  that 
the  Monroe  Doctrine  was  in  no  sense  binding  upon 
Great  Britain,  and  that  her  seizure  of  lands,  in  di- 
rect opposition  to  that  doctrine,  gave  her  a  ' '  coign 
of  vantage  which  she  herself  had  for  the  benefit  of 
her  great  North  American  Empire  for  the  control 
of  the  Canal  across  the  Isthmus." 

England  promised  nothing  in  the  Clayton-Bul- 
wer  Treaty  that  she  was  not  barred  from  holding 
by  the  Monroe  Doctrine,  and  she  gave  up  nothing, 
even  after  promising,  and  the  coign  of  advantage 
thus  embraced  includes  a  claim  over  Panama,  in 
the  opinion  of  Senator  Root.  For  when  asked 
whether  the  Treaty  of  1846  did  not  influence  the 
possible  extension  of  the  Clayton-Bulwer  Con- 
vention to  Panama,  he  took  a  position  which  seems 
contrary  to  the  provisions  and  precedents  of  pub- 
lic law  and  in  direct  repudiation  of  the  clearly  ex- 
pressed attitude  of  successive  administrations  of 
the  United  States,  Mr.  Root  says : 


8      Canal  Tolls  and  American  Shipping 

The  whole  Isthmus  was  impressed  by  the  same  obli- 
gations which  were  impressed  upon  the  Nicaragua  route, 
and  whatever  rights  we  had  under  our  Treaty  of  1846 
with  New  Grenada  were  thenceforth  bound  to  exercise, 
with  due  regard  and  subordination  to  the  provisions  of 
the  Clayton-Bulwer  Treaty. 

Every  precedent  and  practice  of  international 
law  seems  in  conflict  with  such  a  stand. 
Dr.  Oppenheim  says : 

Such  obligation  as  is  inconsistent  with  obligations 
from  treaties  previously  concluded  by  one  State  with 
another  cannot  be  the  object  of  a  treaty  with  a  third 
State. 

In  case  the  arbitration  so  vigorously  urged  by 
Senator  Root  should  find  for  Great  Britain,  should 
we  refuse  to  accept  such  finding  in  order  to  keep 
our  faith  under  the  Panama  Treaty  or  abrogate 
the  Panama  Treaty  in  order  to  submit  to  the  find- 
ing? 

At  all  events  Great  Britain's  adroit  efforts  to 
obtain  a  contract  right  by  extending  the  treaty 
stipulations  contemplated  in  Article  VIII  of  the 
Clayton-Bulwer  Convention  can  be  noted  from 
1850  on. 

Thus  in  1857  Mr.  Cass  in  a  letter  to  Lord 
Napier  in  response  to  a  request  for  a  joint  agree- 
ment said : 

It  would  be  inconsistent  with  the  established  policy 
of  this  country  to  enter  into  a  joint  alliance  with  other 
powers  as  proposed  in  your  lordship's  note. 


Preliminary  Steps  9 

Mr.  Evarts  in  1880  refused  to  consent  to  any 
agreement  with  any  foreign  power  to  participate 
in  the  special  rights  already  enjoyed  by  us  in 
Panama. 

Mr.  Blaine  in  1881  said  in  a  message  to  Mr. 
Lowell : 

In  the  judgment  of  the  President  this  guarantee  (of 
neutrality  on  the  Isthmus)  does  not  require  reinforce- 
ment or  accession  or  assent  from  any  other  power. 

In  President  Arthur's  message  of  December  6, 
1881,  we  find  that  he  said  that  the  prior  guarantee 
of  neutrality  of  the  Isthmus  of  Panama  was  in- 
dispensable and  that  the  interjection  of  any 
foreign  guarantee  might  be  regarded  as  a  super- 
fluous and  unfriendly  act.  He  even  went  so 
far  as  to  say  that  Great  Britain  might  claim  a 
share  in  such  guarantee  through  some  wording  of 
the  Clayton-Bulwer  Convention  and  recommended 
the  abrogation  of  any  clause  that  might  possibly 
be  so  construed. 

Mr.  Blaine  refused  to  agree  to  an  arbitration  of 
the  boundary  between  Costa  Rica  and  Panama  by 
a  European  sovereign  saying  that  any  question 
affecting  the  territorial  limits  of  Panama  was  of 
direct  practical  concern  to  the  United  States.  Mr. 
Bayard  accepted  the  findings  later  but  required 
that  the  scope  and  effect  should  be  defined  with- 
out impairment  of  any  rights  of  the  third  parties, 
not  sharing  in  the  arbitration. 

Mr.  Gresham  in  1893  made  clear  the  position  of 


10    Canal  Tolls  and  American  Shipping 

the  United  States  that  our  approval  of  an  arbi- 
trated boundary  in  no  way  made  the  United 
States  a  party  to  the  litigation. 

Mr.  Bayard  in  1886  spoke  of  the  "  serious  con- 
cern the  United  States  could  but  feel  were  a  Euro- 
pean power  to  resort  to  force  against  a  sister  re- 
public of  this  hemisphere  as  to  the  sovereign  and 
uninterrupted  use  of  a  part  of  whose  territory  we 
are  the  guarantees  under  the  solemn  faith  of  a 
treaty. ' ' 

We,  during  all  this  time,  acted  quickly  to  put 
down  disorder  or  revolution,  interfering  with  the 
use  of  the  railway  across  the  Isthmus. 

Thus  Mr.  Gresham  cabled  in  1895 : 

If  for  any  reason  Colombia  fails  to  keep  transit  open 
and  free,  as  that  Government  is  bound  by  Treaty  of 
1846  to  do,  United  States  are  authorized  by  same  treaty 
to  afford  protection. 

While  many  such  cases  can  be  cited  they  all 
simply  tend  to  the  same  end. 

We  have  shown : 
/'    1.  That  under  the  Treaty  of  1846  the  United 
(    States  enjoyed  certain  special  reciprocal  rights 
with  New  Grenada  over  the  Isthmus  of  Panama. 

2.  That  there  was  a  full  realization  of  the  dan- 
ger of  permitting  any  European  power  to  enter 
into  the  enjoyment  of  similar  privileges  by  any 
form  of  treaty  stipulation  permitting  a  participa- 
tion in  our  contract  rights. 


CHAPTER  II 
THE  CLAYTON-BULWER  CONVENTION 

The  Convention  signed  April  19,  1850,  is  given 
in  full  in  the  Appendix  to  this  volume. 

The  Convention  was  considered  to  be  hurtful  to 
the  spirit  of  the  Monroe  Doctrine. 

Secretary  of  State  Olney,  in  1896,  said : 

In  short  the  true  operation  and  effect  of  the  Clayton- 
Bulwer  Treaty  is  that,  as  respects  all  water  and  land 
interoceanic  communication  across  the  Isthmus,  the 
United  States  has  expressly  bound  itself  so  far  to  waive 
the  Monroe  Doctrine  as  to  admit  Great  Britain  to  a  joint 
protectorate. 

The  Convention  as  stated  in  the  preamble  was 
"for  facilitating  and  protecting  the  construction 
of  a  ship  canal  and  for  other  purposes/ '  It  was 
primarily  to  cover  the  building  of  a  particular 
canal  starting  with  the  river  San  Juan  de 
Nicaragua  on  the  Atlantic  side. 

Article  I  debars  either  the  United  States  or 
Great  Britain  from  acquiring  or  holding 

any  rights  or  advantages  in  regard  to  commerce  or  navi- 
gation through  the  said  Canal  which  shall  not  be  offered 
on  the  same  terms  to  the  citizens  or  subjects  of  the 
other. 

Even  our  English  friends  will  admit  this  Article 

li 


12     Canal  Tolls  and  American  Shipping 

superseded  as  we  have  acquired  rights  on  the 
Isthmus  that  cannot  he  enjoyed  in  common  with 
Great  Britain  in  addition  to  rights  already  ours 
under  the  Treaty  of  1846. 

Besides  in  the  Hay-Pauncefote  Treaty  England 
has  assumed  no  obligation  in  connection  with  the 
use  of  the  Canal. 

Article  II  says  that  even  in  the  event  of  war  be- 
tween the  two  nations  their  vessels  using  the 
Canal  shall  be  exempt  from  blockade,  detention  or 
capture  by  either  belligerent.  While  our  right  to 
use  the  Panama  Canal  as  an  addition  to  our  war 
power  is  conceded  by  Great  Britain,  the  concession 
is  a  guarded  one  and  an  admission  by  us  that  neu- 
trality is  the  same  as  equal  treatment,  would  re- 
sult in  a  challenge  of  the  right  of  the  United 
States  to  have  such  power. 

Article  III  provides  for  a  joint  protection  of 
the  parties  constructing  the  Canal,  together  with 
their  property. 

Article  IV  pledges  Great  Britain  and  the 
United  States  to  use  their  influence  with  States 
having  or  claiming  jurisdiction  over  the  territory 
through  which  the  Canal  passes,  to  facilitate  the 
construction  and  to  secure  free  ports  at  each  end. 

Article  V  is  of  great  importance,  for  in  this  ar- 
ticle Great  Britain  and  the  United  States  engage 
to  jointly  protect  the  Canal  and  guarantee  its 
neutrality.  Both  parties,  however,  reserve  the 
right  to  withdraw  their  protection  or  guarantee 
upon  six  months'  notice  provided  the  persons  or 


The  Clayton-Bulwer  Convention        13 

company  undertaking  or  managing  the  Canal  make 
discriminations  against  one  or  in  favor  of  one 
over  the  other. 

It  will  be  noted  that  management  clearly  covered 
the  regulation  of  commerce  by  tolls  and  otherwise. 
The  penalty  arising  from  discrimination  caused 
simply  the  withdrawal  of  protection  by  the  one 
discriminated  against,  the  neutrality  being  secured 
by  joint  protection  or  by  the  protection  of  one  in 
case  that  one  secured  special  treatment  not  ac- 
corded to  the  other. 

So  we  find  the  neutrality  of  this  particulars 
Canal  provided  for  in  Articles  II  and  V. 

Article  VI  provides  for  inviting  the  cooperation 
of  other  nations  by  their  entering  into  treaty 
stipulations  with  the  two  principals. 

Article  VII  has  to  do  with  the  joint  treatment  of  u 
those  who  supply  the  money  and  do  the  work  on 
the  Canal  with  an  expressed  preference  for  the 
first  reliable  contractor  that  no  time  may  be  lost. 

Now  let  us  see  what  Article  VIII  says : 

The  Governments  of  the  United  States  and  Great 
Britain  having  not  only  desired,  in  entering  into  this 
Convention,  to  accomplish  a  particular  object,  but  also 
to  establish  a  general  principle,  they  hereby  agree  to 
extend  their  protection  by  treaty  stipulations  to  any 
other  practical  communication ,  whetJier  by  canal  or  rail- 
way, across  the  Isthmus  which  connects  North  and  South 
America;  especially  to  the  inter-oceanic  communications 
should  the  same  be  practicable,  whether  by  cable  or  rail- 
way which  are  now  proposed  to  be  established  by  the 
way  of  Tehuantepec  or  Panama. 


14     Canal  Tolls  and  American  Shipping 

In  granting,  however,  their  joint  protection  to  any 
such  canals  or  railways,  as  are  by  this  article  specified, 
it  is  always  understood  by  the  United  States  and  Great 
Britain  that  the  parties  constructing  or  owning  the  same 
shall  impose  no  other  charges  or  conditions  of  traffic 
thereupon  than  the  aforesaid  governments  shall  ap- 
prove of  as  just  and  equitable ;  and  that  the  same  canals 
or  railways,  being  open  to  the  citizens  and  subjects  of 
the  United  States  and  Great  Britain  on  even  terms, 
shall  also  be  open  on  like  terms  to  the  citizens  and  sub- 
jects of  every  other  state  which  is  willing  to  grant  thereto 
such  protection  as  the  United  States  and  Great  Britain 
engage  to  afford. 

Senator  Eoot  has  several  times  hearkened  back 
to  Article  VIII  of  the  Clayton-Bulwer  Convention 
for  an  argument  to  support  his  contention  that  we 
must  treat  the  vessels  of  war  and  commerce  of 
Great  Britain  upon  terms  of  equality  with  our 
own  vessels  under  all  circumstances. 

The  entire  Clayton-Bulwer  Convention  speaks 
of  equal  treatment  owing  to  the  fact  that  equal 
obligations  were  undertaken  in  affording  protec- 
tion and  in  guaranteeing  neutrality. 

By  Articles  II  and  V  of  the  Clayton-Bulwer 
Convention  the  two  Governments  provided  jointly 
for  the  building  of  a  particular  canal,  its  protec- 
tion and  its  neutrality,  the  latter  being  secured  by 
joint  protection.  But  in  Article  VIII  we  find  two 
conditions  covered  separately  in  the  two  para- 
graphs of  the  article. 

The  first  paragraph  establishes  as  a  general 
principle,  to  apply  to  all  available  routes,  the  par- 


The  Clayton-Bulwer  Convention        15 

ticular  object  accomplished  by  joint  protection  in 
earlier  articles  of  the  Treaty,  this  object  being  the 
neutralization  secured  in  Articles  II  and  V  by 
joint  protection. 

The  second  paragraph  provides  that  if  the  two 
countries  do  extend  their  contract  joint  protection 
by  treaty  stipulation  to  other  routes,  such  routes 
shall  be  open  to  the  two  countries  on  equal  terms 
and  on  like  terms  to  other  countries  willing  to  join 
in  the  protection. 

An  important  fact  in  this  connection  already 
noted  is  that  either  party  could  withdraw  the  pro- 
tection by  which  neutrality  and  protection  was 
secured  by  giving  six  months'  notice,  in  case  such 
equality  of  treatment  was  not  secured. 

As  provided  by  the  Clayton-Bulwer  Convention, 
the  Canal  specified  to  run  through  Nicaragua  was 
to  be  neutralized  by  the  two  nations  jointly;  they 
were  to  join  in  the  burdens ;  they  were  to  join  in 
the  protection;  and  they  were  to  join  hand  in  hand 
in  controlling  the  Canal  and  in  seeing  that  all  na- 
tions did  have  exactly  the  same  treatment  by  the 
Company  building  this  canal  through  a  territory 
alien  to  each  of  them. 

This  partnership  control  you  will  see  has  been 
definitely  and  permanently  ended  by  the  last 
treaty,  and  this  termination,  we  see  from  the 
pourparlers,  proves  beyond  question  that  Great 
Britain  understood  this  and  acted  in  complete  ac- 
cord with  such  understanding. 

Equality  of  treatment  under  Article  VIII  was 


16     Canal  Tolls  and  American  Shipping 

the  return  for  a  joint  assumption  of  burden  and 
responsibility,  yet  the  British  contention  is  that 
since  a  certain  privilege  was  obtained  through 
joining  in  protection  this  privilege  must  continue 
even  though  Great  Britain  is  relieved  from  this 
expensive  and  burdensome  responsibility.  That 
is,  in  absence  of  explicit  yielding  to  Great  Britain, 
our  rights  are  to  be  limited  or  destroyed  by  impli- 
cation. But  happily  the  wording  of  the  Hay- 
Pauncefote  Treaty  is  clear  upon  this  point.  Is  it 
"  equal  treatment' '  or  "  neutrality'  ■  that  is 
carried  over  from  Article  VIII?  The  preamble 
to  the  Articles  of  the  Treaty  says:  "the  objec- 
tions that  may  arise  from  the  Clayton-Bulwer 
Convention  to  the  construction  of  the  Canal  are 
to  be  removed  without  impairing  the  general  prin- 
ciple of  'neutralization  established  in  Article 
VIII. '  We  supersede  the  Treaty  in  every  other 
respect. ' ' 

The  preamble  to  rule  I  of  Article  III  of  the 
Hay-Pauncefote  Treaty  says  that  the  United 
States  adopts  as  the  basis  of  neutralization  cer- 
tain rules  substantially  as  embodied  in  the  Suez 
Canal  Treaty.  And  further  light  is  thrown  upon 
the  meaning  by  the  fact  that  in  modifying  the 
Suez  rules  only  such  parts  as  provided  for 
neutralization  were  retained  and  all  references  to 
equal  treatment  thrown  out.  We  shall  examine 
these  rules  further  on. 

But  Great  Britain,  and  some  American  sup- 
porters of  her  protest,  says  that  so  long  as  she  is 


The  Clayton-Bulwer  Convention        17 

not  permitted  to  join  in  protection  that  neutrality- 
secured  by  our  protection  becomes  the  same  as 
equal  treatment  secured  by  joint  protection.  It 
shows  the  demoralization  of  the  public  mind  on 
this  question  when  such  preposterous  conclusions 
are  taken  seriously.  I  should  be  the  last  one  to 
decry  British  diplomatic  capacity,  nor  do  I  find 
anything  wrong  in  their  diplomats  making  the 
best  case  possible  for  their  Government.  They 
certainly  act  upon  Madame  de  Stael's  saying 
that:  "The  patriotism  of  nations  ought  to  be 
selfish.,,  It  has  long  been  a  favorite  expedient  of 
British  diplomatist  to  lay  claims  long  in  advance 
through  pourparlers.  So  the  ingenious  attempts 
up  to  the  last  minute  to  retain  a  partnership  or 
contract  participation  in  the  Hay-Pauncefote 
Treaty  were  to  be  expected. 

The  Treaty  of  Ghent,  which  some  of  those  not 
knowing  of  its  provisions  are  anxious  to  celebrate, 
signed  fifteen  days  before  the  Battle  of  New 
Orleans,  provided  for  the  restoration  of  all  terri- 
tory, places  and  possessions  taken  by  either  nation 
from  the  other  during  the  war,  with  certain  un- 
important exceptions. 

But  the  minutes  of  the  Conference  at  Ghent  kept 
by  Albert  Gallatin  represent  the  English  Com- 
missioners as  declaring  in  exact  words  through 
Mr.  Goulburn: 

We  do  not  admit  Bonaparte's  construction  of  the  law 
of  nations.  We  cannot  accept  it  in  relation  to  any  sub- 
ject matter  before  us. 


18     Canal  Tolls  and  American  Shipping 

While  the  American  Commissioners  did  appre- 
ciate the  meaning,  it  became  known  afterwards 
that  the  British  Ministry  did  not  intend  the 
Treaty  of  Ghent  to  apply  to  the  Louisiana  Pur- 
chase at  aU.  From  1803  to  1815,  Pitt,  the  Duke 
of  Portland,  Grenville,  Perceval,  Lord  Liverpool 
and  Castlereagh,  denied  the  right  of  Napoleon  to 
sell  the  territory  to  us. 

The  words  used  by  Mr.  Goulburn  were  meant  to 
lay  the  foundation  for  a  claim  on  the  Louisiana 
Purchase  entirely  external  to  the  provisions  of  the 
Treaty  of  Ghent.  And  if  Pakenham  had  not  been 
defeated  we  should  have  been  deprived  of  this 
territory  and  should  have  had  no  canal.  Of 
course  no  one  considers  extraneous  matter  as  per- 
tinent except  those  who  cannot  gain  their  ends 
through  the  plain  terms  of  a  contract. 

When  the  Treaty  of  1824  between  the  United 
States  and  Eussia  was  about  to  be  exchanged  the 
Russian  Minister  informed  Secretary  of  State 
Adams  that  he  was  instructed  by  his  Government 
to  file  an  explanatory  note  at  the  time  of  the  ex- 
change of  ratifications,  stating  the  views  of  his 
Government  as  to  the  meaning  and  effect  of  cer- 
tain articles  of  the  Treaty.  Mr.  Adams  informed 
him  that  such  a  note  could  have  no  effect  whatever 
on  the  Treaty  unless  it  was  sent  to  the  Senate  with 
the  Treaty  and  received  its  approval. 

We  had  a  similar  prior  filing  by  Sir  Henry  Bul- 
wer  of  a  statement  that  the  British  Government 
did  not  understand  the  engagements  of  the  Clay- 


The  Clayton-Bulwer  Convention        19 

ton-Bulwer  Convention  to  apply  to  British  settle- 
ments at  Honduras  or  its  dependencies. 

Fortunately,  though,  in  the  case  of  the  Hay- 
Pauncefote  Treaty  the  negotiations  support  all  the 
American  contentions  as  the  letters  exchanged 
clear  up  all  points  in  dispute,  and  clearly  restrict 
the  sphere  of  operation  of  the  rules  to  a  field  in 
which  they  affect  all  persons  and  vessels  alike. 

I  have  already  referred  to  the  different  para- 
graphs of  Article  VIII,  but  Mr.  Hay  is  so  freely 
quoted  in  what  he  might  say  were  he  alive  that  I 
wish  to  advance  the  evidence  of  his  written  ideas 
at  the  time  of  the  negotiations.  In  the  memoran- 
dum prepared  by  him  we  find  in  referring  to  Ar- 
ticle IV  of  the  Hay-Pauncefote  Treaty:  "  It  is^x 
thought  to  do  entire  justice  to  the  reasonable  de- 
mands of  Great  Britain  in  preserving  the  gen- 
eral principle  of  neutralization  and  at  the  same 
time  to  relieve  the  United  States  of  the  vague,  in- 
definite, and  embarrassing  obligations  imposed  by 
the  eighth  article  of  the  Clayton-Bulwer  Conven- 
tion." 

And  yet,  while  plainly  done  away  with  by  Mr. 
Hay,  who  in  good  faith  preserves  the  general 
principle  of  neutrality,  we  find  Senator  Boot  in  his 
Senate  Speech  endeavoring  to  revive  these  same 
vague,  indefinite  and  embarrassing  obligations  of 
Article  VIII. 

The  Suez  Canal  had  been  neutralized  in  1888  by 
certain  rules  and  under  the  first  Hay-Pauncefote 
Treaty  certain  rules  were  adopted  to  secure  the 


20     Canal  Tolls  and  American  Shipping 

free  navigation  of  the  Canal  that  were  in  many- 
respects  like  those  of  the  Suez  and  it  was  said 
these  rules  were  to  preserve  and  maintain  the 
general  principle  of  neutralization  of  Article  VIII 
of  the  Clayton-Bulwer  Convention,  not  the  latter 
part  of  Article  VIII  as  Sir  Edward  Grey  labor^ 
to  prove  by  a  process  of  elimination,  which 
eliminates  the  general  principle  of  neutrality  al- 
together and  substitutes  for  it  equal  rights. 

No  one  can  deny  that  neutrality  was  secured  by 
joint  protection  in  the  Clayton-Bulwer  pact,  just 
as  was  equal  treatment.  We  were  willing  to  carry 
on  the  neutrality  of  the  Canal  and  it  is  definitely 
pledged  and  the  rules  by  which  we  shall  permit 
its  neutral  use  are  clearly  set  forth  in  rules  given 
in  Article  III  the  protection  being  given  by  us 
alone. 

Surely  if  we  had  been  desirous  of  giving  equal, 
treatment  as  well  it  would  have  been  so  stated. 
It  is  certainly  not  implied  but  on  the  contrary  is 
definitely  refused  as  we  shall  see  when  we  trace 
the  origin  of  the  rules. 

Do  not  assume  for  an  instant  that  we  could  not 
have  built  a  canal  without  Great  Britain's  per- 
mission. This  all  too  general  assumption  con- 
fesses a  loyal  subserviency  abhorrent  to  Ameri- 
cans— at  least  to  the  far  greater  part  of  them. 
The  Clayton-Bulwer  Convention  had  been  violated 
by  Great  Britain,  but  we  were  not  goaded  to  abro- 
gate it  even  though  justified. 

Sir  Edward  Grey  says  that  if  we  had  built  the 


The  Clayton-Bulwer  Convention        21 

Canal  under  the  Clayton-Bulwer  Treaty  we  must 
have  given  English  vessels  equal  treatment  with 
our  own,  and  then  conveniently  forgets  that  the 
Hay-Pauncefote  Treaty  superseded  the  Clayton- 
Bulwer  Convention.  But  we  are  not  building  un- 
der the  Clayton-Bulwer  bargain. 

President  Pierce  in  a  message  of  1856  said: 

It  was  with  surprise  and  regret  that  the  United 
States  learned  that  a  military  expedition  under  the  au- 
thority of  the  British  Government  had  landed  at  San 
Juan  del  Norte  in  the  State  of  Nicaragua  and  taken 
forcible  possession  of  that  port,  the  necessary  terminus 
of  any  canal  or  railway  across  the  Isthmus  within  the 
territories  of  Nicaragua. 

It  did  not  diminish  to  us  the  unwelcomeness  of  this  act 
on  the  part  of  Great  Britain  to  find  that  she  assumed 
to  justify  it  on  the  ground  of  an  alleged  protectorship 
of  a  small  and  obscure  band  of  uncivilized  Indians, 
whose  proper  name  had  even  been  lost  to  history,  who 
did  not  constitute  a  state  capable  of  territorial  sov- 
ereignty either  in  fact  or  in  right,  and  all  political  in- 
terest in  whom  and  in  the  territory  they  occupied  Great 
Britain  had  previously  renounced  by  successive  treaties 
with  Spain  when  Spain  was  sovereign  to  the  country  and 
subsequently  with  independent  Spanish  America. 

The  Fifty-first  Congress  took  up  this  subject 
very  fully. 

The  Committee  on  Foreign  Relations  of  the 
Senate  presented  to  the  Fifty-first  Congress  a  re- 
port containing  a  review  of  the  history  of  the 
Clayton-Bulwer  Treaty  and  it  reported  to  the 


22     Canal  Tolls  and  American  Shipping 

Senate  its  conclusion  that  it  had  become  obsolete 
and  that 

The  United  States  is  at  present  under  no  obligation, 
measured  either  by  the  terms  of  the  Convention,  the 
principles  of  public  law  or  good  morals,  to  refrain  from 
promoting  in  any  way  it  may  deem  best  for  its  own  in- 
terests the  construction  of  this  Canal,  without  regard 
to  anything  contained  in  the  Convention  of  1850. 

To  this  report  are  appended  the  names  of  every 
member  of  the  Committee  among  them  two  who 
have  held  the  office  of  Secretary  of  State,  Messrs. 
Evarts  and  Sherman. 

The  United  States  Government  had  to  obtain 
the  necessary  powers  from  Congress  to  build  the 
Canal,  and  it  could  not  ask  Congress  to  use  the 
money  of  the  United  States  in  a  project  controlled 
in  any  way  by  a  foreign  nation. 

Abrogation  would  however  have  left  both  par- 
ties freedom  of  action  in  Central  America,  if  we 
abandoned  the  Monroe  Doctrine.  The  Monroe 
Doctrine  already  barred  Great  Britain  from  doing 
what  she  agreed  not  to  do  in  the  Clayton-Bulwer 
Treaty  and  the  first  Hay-Pauncefote  Treaty  was 
considered,  as  was  the  Clayton-Bulwer  Treaty, 
in  violation  of  the  Monroe  Doctrine  and  as  un- 
duly limiting  the  power  of  the  United  States 
and  was  denounced  by  the  Democratic  Party 
in  its  Denver  Platform.  The  Clayton-Bulwer 
Treaty  was  really  a  convention  covering  an 
uncertain  contingency  as  to  time  and  place,  leav- 


The  Clayton-Bulwer  Convention        23 

ing  to  joint  action  the  preparation  of  rules  of 
management  and  control. 

The  Clayton-Bulwer  Convention  is  superseded. 
We  have  traced  the  bearings  of  facts  up  to  the 
time  of  such  abrogation. 

It  is  plain  to  be  seen  that  if  the  joint  protection 
by  which  neutrality  and  equal  treatment  could  be 
secured  in  this  convention  should  be  extended  by 
treaty  stipulation  that  grounds  for  claiming  equal 
participation  would  be  laid.  Since  1850  we  had 
been  resisting  adroit  efforts  to  obtain  such  joint 
contract  extension. 

Yet  with  a  persistency  and  statecraft  to  be  ad- 
mired we  find  the  first  treaty  submitted  in  the 
Hay-Pauncefote  negotiations  embodying  a  sur- 
render of  this  principle  on  our  part  and  as  fast  as 
beaten  on  one  demand  another  was  presented. 

Happily  for  us  the  influence  of  a  firm  and  con- 
sistent traditional  policy  exerted  for  over  fifty 
years  prevented  such  surrender. 


CHAPTER  III 

NEUTRALITY  AND  EQUAL  TREATMENT  AND 
THE  SUEZ  RULES 

We  find  that  by  the  preamble  to  the  Hay-Paunce- 
fote  Treaty  its  object  is 

To  remove  any  objection  which  may  arise  out  of  the 
Convention  of  1850,  commonly  called  the  Clayton-Bul- 
wer  Treaty,  to  the  construction  of  such  canal  under 
the  auspices  of  the  United  States,  without  impairing  the 
general  principle  of  neutralization,  established  in  Article 
VIII  of  that  Convention. 

The  American  people  very  clearly  were  deter- 
mined that  a  participation  by  other  nations  in  a 
canal  built  by  us  would  not  be  permitted.  Some 
of  our  statesmen  strongly  recommended  the  abro- 
gation of  the  Clayton-Bulwer  Convention  and  we 
had  ample  reasons  for  doing  so,  the  Treaty  hav- 
ing been  violated  in  letter  and  spirit.  This  would 
doubtless  have  given  rise  to  bad  feeling  as  firm 
assertion  of  American  rights  for1  some  reason 
seems  unpopular  with  a  part  of  our  people.  Un- 
questionably the  new  treaty  was  executed  to  ' l  save 
the  face"  of  Great  Britain  for  otherwise  it  must 
have  been  abrogated. 

So  in  order  not  to  impair  the  general  principle 

24 


Neutrality  and  Equal  Treatment       25 

of  neutralization  we  adopt  certain  rules  in  Article 
III  of  the  Hay-Pauncefote  Treaty  as  a  basis  for 
such  neutralization. 

It  is  stated  that  these  rules  are  substantially  as 
embodied  in  the  Convention  of  Constantinople,  for 
the  free  navigation  of  the  Suez  Canal.  Much  light 
will  be  thrown  upon  the  controversy  over  the 
meaning  of  the  Treaty  by  an  examination  of  this 
convention  which  is  given  in  the  Appendix.  For 
what  is  omitted  is  just  as  important  as  what  is  re- 
tained in  clearing  up  the  intention  of  the  rules. 

The  British  contention  is  that  under  the  rules  as 
appearing  in  the  Hay-Pauncefote  Treaty,  they  are 
entitled  to  equal  treatment  because  in  a  former 
treaty  equal  treatment  was  secured  by  joint  pro- 
tection and  joint  protection  being  done  away  with 
equal  treatment  must  result.  The  wording  of  the 
protest  given  in  full  in  the  Appendix  is  so  ingenu- 
ous that  it  must  be  given : 

It  certainly  was  not  the  intention  of  His  Majesty's 
Government  that  any  responsibility  for  the  protection 
of  the  Canal  should  attach  to  them  in  the  future.  Neu- 
tralization must,  therefore,  refer  to  the  system  of  equal 
rights. 

In  other  words  a  certain  privilege  gained 
through  joining  in  protection  must  remain  al- 
though we  relieve  Great  Britain  from  this  ex- 
pensive and  burdensome  responsibility. 

Senator  Boot  says  that  the  Panama  Canal  is  to 
be  made  "neutral  upon  the  same  terms  as  were 
specified  in  the  Clayton-Bulwer  agreement."    Sir 


26     Canal  Tolls  and  American  Shipping 

Edward  Grey  by  a  strange  coincidence  makes  the 
same  misstatement  in  his  protest. 
\  Bead  the  Hay-Panncefote  Treaty.  It  abrogates 
the  Clayton-Bulwer  Convention,  preserving  only 
the  general  principle  of  neutrality,  and  this  neu- 
_trality  is  to  be  secured  by  elaborate  and  stated 
rules  based  upon  rules  adopted  thirty-eight  years 
after  the  Clayton-Bulwer  Treaty,  and  even  these 
Suez  rules  of  1888  were  radically  changed  that  the 
United  States  might  fortify  the  Canal  and  might 
have  and  enjoy  all  the  rights  incident  to  construc- 
tion, an  well  as  the  exclusive  right  of  providing  for 
the  regulation  and  management  of  the  Canal. 

England  in  1882  seized  Egypt  and  when  secure 
in  possession  in  1888,  in  compliance  with  Great 
Britain's  proposition  for  a  national  conference  of 
the  Powers,  a  treaty  of  seventeen  articles  was 
drawn  up  between  the  following:  Great  Britain, 
Austro-Hungary,  France,  Germany,  Holland. 
Italy,  Spain,  Eussia  and  Turkey,  we  find  Great 
Britain  became  a  party,  with  the  reservation  that 
the  terms  of  such  treaty  should  not  be  brought 
into  operation  in  so  far  as  they  would  not  be  com- 
patible with  the  transitory  and  exceptional  condi- 
tion in  which  Egypt  was  put  for  the  time  being  in 
consequence  of  her  occupation  by  British  forces, 
and  in  so  far  as  they  might  fetter  the  liberty  of 
action  of  the  British  Government  during  such  oc- 
cupation (See  Martens,  2d  ser.  Page  557). 

Not  only  has  there  been  a  desire  to  keep  alive 
the  abrogated  Clayton-Bulwer  Treaty,  but  since 


Neutrality  and  Equal  Treatment       27 

the  Treaty  of  Constantinople  was  drawn  upon  in 
shaping  the  rules  of  neutrality  there  is  an  attempt 
to  read  into  rules  adopted  by  us  in  Article  III  for 
securing  neutrality  the  various  obligations  of  the 
Suez  rules  whether  found  in  our  rules  or  not.  In 
revising  the  rules  in  order  to  adapt  them  to  the 
intentions  of  the  negotiators  every  feature  not  ap- 
plying to  the  neutrality  which  they  engaged  to 
offer  was  stricken  out. 

Thus  from  Article  I  was  taken  out:  "The 
Canal  shall  always  be  open  in  time  of  peace  as  in 
time  of  war  regardless  of  flag."  The  rules  do  not 
guarantee  at  all  time  and  for  all  powers  the  free 
use  of  the  Canal,  nor  forbid  the  keeping  of  men  of 
war  in  or  near  the  Canal,  nor  provide  that  the 
Canal  must  remain  open  in  time  of  war.  In  fact 
the  changes  made  from  the  Suez  Canal  rules 
clearly  put  the  United  States  in  a  class  apart  in 
all  such  respects. 

Since  the  rules  as  adopted  are  designed  to  em- 
body the  conditions  under  which  we  agree  to  up- 
hold the  neutrality  of  the  Canal,  let  us  seek  the 
definitions  of  neutrality  as  given  in  Dr.  Oppen- 
heim's  International  Law.    He  says: 

Neutrality  may  be  defined  as  the  attitude  of  impar- 
tiality toward  belligerents,  adopted  by  third  states  and 
recognized  by  belligerents,  such  attitude  creating  rights 
and  duties  between  the  impartial  states  and  the  belliger- 
ents. 

No  one  but  ourselves  is  permitted  to  maintain 


28     Canal  Tolls  and  American  Shipping 

__ihe  neutrality  of  the  Canal;  we  do  not  agree  to 
be  neutral  toward  an  enemy,  hence  we  hold  the 
Canal  neutral  as  to  other  powers.  Again  quot- 
ing from  Dr.  Oppenheim : 

Since  neutrality  is  an  attitude  of  impartiality  it  ex- 
cludes such  assistance  and  succor  to  one  of  the  bellig- 
erents as  is  detrimental  to  the  other,  and  further  such 
injuries  to  one  as  benefit  to  the  other. 

Reading  Rule  1  of  Article  III  covers  such  con- 
tingencies of  impartial  treatment  in  that  we  treat 
the  vessels  of  commerce  and  of  war  of  all  nations 
alike  not  simply  as  regards  charges  and  conditions 
of  traffic  but  in  all  other  ways  in  which  we  might 
aid  or  succor  one  or  injure  the  other. 

How  closely  we  follow  in  our  rules  the  Oppen- 
heim doctrines  is  shown  by  again  quoting  him : 

Neutrals  must  prevent  belligerents  from  making  use 
of  their  neutral  territory  and  of  their  resources  for  mili- 
tary and  naval  purposes  during  the  war. 

>  A  hurried  resume  of  the  rules  shows  that 
vessels  of  war  of  a  belligerent  must  not  embark 
or  disembark  troops,  munitions  of  war,  or  warlike 
materials,  that  the  Canal  must  never  be  blockaded, 
that  vessels  of  war  of  a  belligerent  shall  not  re- 
main within  three  miles  of  either  end,  and  that  a 
vessel  of  war  of  a  belligerent  shall  not  depart 
within  24  hours  from  the  departure  of  a  vessel  of 
war. 

In  fact  it  will  be  found  that  every  contingency 
connected  with  belligerent  operations  is  covered 


Neutrality  and  Equal  Treatment       29 

by  our  rules  but  that  having  adopted  such  rules 
to  preserve  the  neutrality  of  the  Canal  they  are 
not  capable  of  being  construed  nor  stretched  to 
cover  conditions  having  to  do  with  ordinary  com- 
merce unaffected  by  belligerent  operations. 

We  have  the  support  of  Dr.  Oppenheim  in  this ; 
following  him  further  in  defining  and  explaining 
neutrality  we  find : 

Neutrality  is  a  condition  during  a  condition  of  war 
only. 

Eights  and  duties  deriving  from  neutrality  do  not  exist 
before  the  outbreak  of  war. 

Hence  in  applying  rules  to  conserve  the  neu- 
trality of  the  Canal  such  rules  if  directly  apply- 
ing to  accepted  understanding  of  neutral  obliga- 
tions could  not  be  extended  to  cover  the  ordinary 
conditions  and  far  more  extended  existence  of 
peaceful  commerce  except  by  specific  provisions  or 
by  implication  from  the  fact  that  no  articles  in  the 
treaty  granted  further  powers. 

Now,  Lord  Lansdowne  did  attempt  to  make 
these  rules  apply  to  ordinary  commerce  when  he 
suggested  August  3d,  1901,  an  amendment  that 
the  neutrality  rules  should  "govern  all  inter- 
oceanic  communications  across  the  Isthmus. ' ' 

This  will  be  referred  to  later  as  it  shows  clearly 
a  request  for  the  adaptation  of  the  rules  to  the 
peaceful  commerce  using  the  Canal  and  the  studied 
refusal  of  the  United  States  to  grant  such  re- 
quest. 


L-'' 


30     Canal  Tolls  and  American  Shipping 

The  action  of  the  Senate  is  very  enlightening 
npon  this  point  as  it  struck  out  the  expression 
"in  time  of  war  as  in  time  of  peace/ '  but  retained^ 
the  linking  together  of  vessels  of  war  and  peace, 
so  that  rules  applying  to  one  must  apply  to  the 
other. 

But  the  changes  from  the  rule  prove  even  more. 

There  is  an  idea  prevalent  that  the  rules  for  w 
neutrality  are  not  applicable  in  their  entirety  to 
neutral  obligations,  and  that  Eule  1  is  inconsistent 
unless  applied  to  peaceful  commerce.    Let  us  ex- 
amine them  as  briefly  as  possible. 

The  intention  is  to  make  sure  that  we  shall  not 
play  favorites  in  time  of  war  by  extending  any 
special  privileges  or  treatment  to  one  belligerent 
as  against  another,  either  by  hindering  or  delay- 
ing his  vessels  of  war  or  by  interfering  with  his 
vessels  of  commerce.  Hostile  operations  might 
be  hampered,  even  by  unjust  or  inequitable 
charges  exacted  in  such  a  way  that  under  particu- 
lar circumstances  such  charges  might  bear  more 
heavily  on  one  belligerent  than  another.  So  we 
agree  not  to  discriminate  as  between  nations  in 
respect  of  the  conditions  or  charges  of  traffic  or 
otherwise — not  simply  tolls  but  any  rules  affect- 
ing passage  through  the  Canal  in  the  interest  of 
one  belligerent  as  against  another.  In  fact  the 
British  interpretation  would  prevent  us  at  any 
time  favoring  even  vessels  belonging  to  our  Gov- 
ernment in  the  way  of  docking  facilities,  coaling 
arrangements,  use  of  repair  shops,  signal  stations, 


Neutrality  and  Equal  Treatment       31 

anchorage  grounds,  wharf  and  watering  facilities, 
or  otherwise. 

But  say  the  English  partisans,  Great  Britain 
will  not  insist  upon  this.  If  we  admit  her  right  to 
insist,  as  we  do,  when  we  strip  from  Article  III  its 
bearing  upon  the  neutral  operation  of  the  Canal, 
she  can  object  and  doubtless  would.  Each  time 
an  insurmountable  objection  which  invalidates  her 
claims  is  brought  we  find  partisans  eager  to  waive 
it. 

The  equality  of  treatment  covered  in  the  rules 
is  equality  of  treatment  of  belligerents  meted  out 
under  the  rules  we  have  adopted  to  secure  the 
neutralization  of  the  Canal.  We  can  only  be 
neutral  as  between  others;  we  cannot  be  neutral 
in  case  we  are  ourselves  a  belligerent. 

While  this  was  admitted  by  Lord  Lansdowne 
we  find  Sir  Edward  Grey,  realizing  that  such  prior 
admission  was  damaging  to  their  case,  endeavor- 
ing to  extend  us  certain  special  rights  for  our 
man-of-war  on  the  score  that  we  now  have  sov- 
ereign rights  in  the  Canal  Zone.  This  is  a  dan- 
gerous concession,  for  if  we  are  in  a  class  apart 
with  our  man-of-war  we  are,  of  course,  in  a  class 
apart  with  our  merchant  vessels,  and  changes,  in 
vital  respects,  brought  about  by  changed  relations 
of  principals,  render  the  entire  treaty  voidable. 

Since  Dr.  Oppenheim  states  in  his  recent  book- 
let that  we  have  no  such  rights,  a  quotation  from 
Sir  Edward  Grey's  protest  will  be  of  interest. 
The  protest  says : 


32     Canal  Tolls  and  American  Shipping 

Now  that  the  United  States  has  became  the  practical 
sovereign  of  the  Canal,  His  Majesty's  Government  do 
not  question  its  title  to  exercise  belligerent  rights  for 
its  protection. 

Since  successful  contention  that  "all  nations" 
of  Rule  1  includes  the  United  States  is  manifestly 
impossible,  the  United  States  is  of  course  in  a  class 
apart.  While  this  was  conceded  February  22, 
1901,  by  Lord  Lansdowne  and  by  Sir  Edward  Grey 
in  the  late  protest  by  the  British  Government,  we 
find  a  labored  argument  in  a  recent  booklet  by  Dr. 
Oppenheim,  which  taking  as  an  axiom  the  fact 
that  the  United  States  is  not  in  a  class  apart, 
proves  to  his  satisfaction  that  we  too  are  pre- 
vented from  using  the  Canal  to  our  advantage  in 
time  of  war.  As  his  premise  is  wrong  his  conclu- 
sion cannot  hold  and  in  view  of  the  fact  that  what 
he  contends  for  is  already  conceded  by  the  British 
Government  his  inferences  may  be  ignored. 
While  wrong  as  to  his  premises  however,  he  is  too 
well  versed  in  international  law  to  attempt  to  give 
a  strained  and  impossible  definition  to  "neutral- 
ity. ' '     He  says : 

There  ought,  however,  to  be  no  doubt  that  the  United 
States  is  as  much  bound  to  obey  the  rules  of  Article  III 
of  the  Hay-Pauncefote  Treaty  as  Great  Britain  or  any 
other  foreign  State.  These  rules  are  intended  to  invest 
the  Canal  with  the  character  of  neutrality.  If  the 
United  States  were  not  bound  to  obey  them,  the  Canal 
would  lose  its  neutral  character,  and,  in  case  she  were 
a  belligerent  her  opponent  would  be  justified  in  con- 


Neutrality  and  Equal  Treatment       33 

sidering  the  Canal,  a  part  of  the  region  of  war  and  could, 
therefore,  make  it  the  theater  of  war. 

Great  Britain  contended  during  the  negotiations 
that  while  other  nations  if  our  enemy  were  free 
to  violate  the  neutrality  of  the  Canal  in  time  of 
war  in  which  we  were  engaged,  she  as  a  party  to 
the  Treaty  could  not.  Lord  Lansdowne  said, 
August  3,  1901 : 

I  understand  that  by  the  omission  of  all  reference  to 
the  matter  of  defense  the  United  States  Government 
desires  to  reserve  the  power  of  taking  measures  to  pro- 
tect the  Canal,  at  any  time  when  the  United  States  may 
he  at  war,  from  destruction  or  damage  at  the  hands  of 
enemy  or  enemies. 

Mr.  Hay  clearly  states  his  sense  of  our  rights 
and  they  are  in  accord  with  Lord  Lansdowne 's 
when  he  states  that  the  omission  of  the  words  "in 
time  of  peace  as  in  time  of  war"  is  that  this 
"would  give  to  the  United  States  the  clear  right 
to  close  the  Canal  against  another  belligerent  and 
to  protect  and  defend  itself  by  whatever  means 
might  be  necessary."  And  that  this  omission  dis- 
pensed with  necessity  of  the  Davis  amendment. 

Is  not  this  a  clear  intimation  to  Great  Britain*/ 
that  our  ships  are  not  to  be  treated  upon  terms  of 
equality  with  the  vessels  of  other  powers? 

Now,  Lord  Lansdowne  did  attempt  to  make 
these  rules  apply  to  ordinary  commerce  when  he 
suggested  August  3d,  1901,  an  amendment  that 
the  neutrality   rules   should  "govern  all  inter- 


34     Canal  Tolls  and  American  Shipping 

oceanic  communications  across  the  Isthmus.' p 
This  was  stricken  out  as  explained  elsewhere. 
But  we  have  in  force  an  article  covering  all  com- 
munications not  affected  by  the  obligations  and 
duties  of  neutrality.  Let  us  read  this  strong, 
virile  and  unambiguous  Article  II,  which  says : 

It  is  agreed  that  the  Canal  may  be  constructed  under 
the  auspices  of  the  Government  of  the  United  States, 
either  directly  at  its  own  cost,  or  by  gift  or  loan  of 
money  to  individuals  or  corporations,  or  through  sub- 
scription to  or  purchase  of  stock  or  shares,  and  that, 
subject  to  the  provisions  of  the  present  treaty,  the  said 
Government  shall  have  and  enjoy  all  rights  incident  to 
construction,  as  well  as  the  exclusive  right  of  providing 
for  the  regulation  and  management  of  the  Canal. 

We  agree  in  Article  III  not  to  use  the  Canal  to 
advance  the  fortunes  of  any  particular  belligerent 
by  a  frank  and  open  adoption  of  rules  of  neutrality 
to  be  applied  by  us  to  the  nations  of  the  world  as 
the  conditions  under  which  they  may  use  the 
Canal.  If  a  belligerent  should  betray  the  faith 
we  put  in  him  by  injuring  the  Canal  for  hostile 
advantage  we  could  debar  such  nation  from  fur- 
ther use  of  the  Canal  after  belligerent  operations, 
or  penalize  such  nation  in  our  discretion. 

But  outside  of  such  obligations  of  neutrality  we 
have  in  Article  II  full  freedom  of  action.  While 
under  our  favored  nation  treaties  we  shall  prob- 
ably accord  in  general  equal  tolls  to  the  vessels  of 
other  nations,  there  is  nothing  to  prevent  our  mak- 


Neutrality  and  Equal  Treatment       35 

ing  reciprocal  concessions  with  other  nations.  I 
of  course  assumed  that  Senator  Eoot  justified  on 
this  score  his  negotiation  of  the  Tripartite  Treaty 
between  Panama,  Colombia  and  the  United  States, 
extending  reciprocal  concessions  not  accorded  to 
all  other  nations.  In  similar  manner  the  Hay- 
Bunau-Varilla  Treaty  extended  special  privileges 
to  Panama. 

No  one  will  question  or  deny  that  the  rules  of 
Article  III  are  to  be  taken  together.  If  the  in- 
terpretation of  one  rule  as  forbidding  preference 
for  our  own  vessels  of  commerce  and  war  renders 
the  remaining  rules  absurd  we  have  reasons  as 
old  as  Euclid's  teachings  for  setting  such  inter- 
pretation aside. 

Eule  1  says  that  the  Canal  shall  be  free  and 
open  to  the  vessels  of  Commerce  and  War  of  all 
nations  observing  these  rules  upon  terms  of  en- 
tire equality.  Now  they  construe  this  to  mean 
that  we  are  prevented  from  preferring  our  own 
vessels  of  commerce. 

But  if  it  applies  to  vessels  of  Commerce  it  must 
in  exact  terms  apply  to  vessels  of  War. 

In  other  words,  under  any  unquibbled  construc- 
tion of  this  section  we  cannot  exclude  vessels  of 
war  and  include  vessels  of  commerce  under  our 
flag  unless  we  are  in  a  class  apart,  as  of  course  we 
are. 

Please  read  Sections  1,  2,  3,  4,  5  and  6,  for  they 
must  be  read  together  to  clear  up  this  question. 

All,  I  believe,  will  admit  that  the  constitutional 


36     Canal  Tolls  and  American  Shipping 

authority  to  build  this  canal  existed  in  the  war 
power  of  the  United  States.  Two  Presidents  have 
confirmed  this  view  in  their  statements  that  this 
canal  is  an  addition  to  our  war  power  as  it  ad- 
mits of  quicker  transfer  of  our  naval  forces  from 
one  ocean  to  another. 

Yet  advocates  of  the  British  contention  take 
the  stand  that  we  are  forhidden  to  discriminate  in 
favor  of  our  own  vessels  of  commerce,  and  as 
vessels  of  war  and  commerce  are  linked  together, 
to  be  consistent  they  must  argue  that  we  cannot 
discriminate  in  favor  of  our  own  vessels  of  war. 

Hence  they  must  take  the  position  that  if  dur- 
ing war  with  a  foreign  power  we  find  an  enemy's 
man-of-war  in  the  Canal,  we  cannot  drive  it  out 
and  if  it  leaves  such  waters  we  must  wait  twenty- 
Jour  hours  before  giving  chase.  And  since  under 
Article  II  we  are  given  the  "  Exclusive  right  of 
providing  for  the  regulation  and  management  of 
the  Canal,' '  if  engaged  in  war  our  ships  finding 
themselves  in  the  Canal  must  chase  themselves  out. 
Can  we  reach  any  other  logical  sequence  of  their 
stand?    Need  its  absurdity  be  pointed  out? 

The  rules  in  their  entirety  are  simply  a  means 
of  defining  the  conditions  under  which  we  shall 
hold  the  Canal  neutral.  There  has  been  so  much 
international  misrepresentation  that  this  fact  has 
not  been  grasped  except  by  those  who  have  given 
this  subject  exhaustive  study. 

The  usefulness  of  these  rules  in  respect  to  neu- 
tral treatment  and  how  they  are  apart  from  tolls 


Neutrality  and  Equal  Treatment       37 

and  regulations  connected  with  the  commercial  use 
of  the  Canal  is  not  usually  understood  on  account 
of  the  insincerity  of  those  who  attempt  to  uphold 
the  British  contention  by  ignoring  the  object  to 
be  attained  by  the  rules  as  well  as  the  clear  pro- 
visions of  Article  II  of  the  Treaty. 

I  heard  an  eminent  authority  make  the  state- 
ment a  few  days  ago  that  if  Mr.  Hay  were  alive  he 
would  say  that  the  toll  exemption  clause  was  in 
violation  of  the  Treaty.  Unfortunately  Mr.  Hay 
is  not  here  but  he  is  on  record  in  correspondence 
connected  with  the  negotiations  of  the  Treaty  in 
which  he  says :  "Upon  due  consideration  of  these 
suggestions,  and  at  the  same  time  to  put  all  the 
powers  on  the  same  footing,  viz. :  that  they  could 
use  the  Canal  only  by  complying  with  the  rules  of 
neutrality  adopted  and  prescribed,  an  amendment 
to  Lord  Lansdowne's  amendment  was  proposed 
and  agreed  upon." 

This  amendment  according  to  Mr.  Hay  secured 
the  following: 

Thus  the  whole  idea  of  contract  right  in  the  other 
powers  is  eliminated  and  the  vessels  of  any  nation  which 
shall  refuse  or  fail  to  observe  the  rules  adopted  and 
prescribed  may  be  deprived  of  the  use  of  the  Canal. 

Here  we  find  in  Mr.  Hay's  own  written  words  a/ 
full  appreciation  of  the  fact  that  these  are  rules^ 
of  neutrality  and  that  they  are  binding  upon  the 
vessels  of  other  nations. 

This  reduced  to  simple  phrasing  is  that  we 


38     Canal  Tolls  and  American  Shipping 

only  ask  other  nations  to  ohey  our  rules  of  neu- 
trality and  we  pledge  ourselves  that  in  war  in 
which  we  are  not  engaged  this  strait  shall  be  held 
free  and  neutral  by  us  to  even  the  war  vessels  of 
belligerents,  they  being  required  to  continue  on 
their  good  behavior  when  they  pass  from  the  high 
seas  to  waters  under  our  control,  management, 
protection  and  ownership. 

Let  us  see  whether  the  statement  that  the 
British  Government  considers  these  rules  as  be- 
ing formulated  for  the  commercial  control  of  the 
Canal;  Lord  Lansdowne  under  date  of  August  3, 
1901,  wrote :  "It  would  appear  to  follow  that  the 
whole  responsibility  for  upholding  these  rules  and 
thereby  maintaining  the  neutrality  of  the  Canal 
would  henceforward  be  assumed  by  the  Govern- 
ment of  the  United  States. 

In  the  same  communication  he  says : 

While  indifferent  as  to  the  form  in  which  the  point 
is  met,  I  must  emphatically  repeat  the  objections  of  his 
Majesty's  Government  to  being  bound  by  stringent  rules 
of  neutral  conduct  not  equally  binding  upon  other  pow- 
ers. I  would  therefore  suggest  the  insertion  in  Rule  1 
after  "all  nations"  of  the  words  "which  shall  agree  to 
observe  these  rules."  This  addition  will  impose  upon 
other  powers  the  same  self-denying  ordinance  as  Great 
Britain  is  desired  to  accept,  and  will  be  an  additional 
security  for  the  neutralization  of  the  Canal,  which  it 
will  be  the  duty  of  the  United  States  to  maintain. 

We  know  this  effort  to  obtain  a  contract  right 
in  canal  management  was  defeated,  but  no  one 


Neutrality  and  Equal  Treatment       39 

can  logically  contend  that  this  does  not  show  a 
clear  appreciation  and  acceptance  of  the  fact  that 
these  rules  are  for  the  purpose  of  denning  our  i>^ 
understanding  of  our  neutral  obligations. 

Of  course,  as  the  final  treaty  is  worded,  we  find 
in  the  words  of  Mr.  Hay : 

That  no  other  power  had  now  any  right  in  the  prem- 
ises or  anything  to  give  up  or  part  with  as  a  considera- 
tion for  acquiring  such  a  contract  right. 

Certainly  no  one  will  say  that  "all  nations"  as 
used  in  the  above  quotation  from  Lord  Lans- 
downe's  communication  includes  the  United 
States. 

Following  the  use  of  the  word  " nations' f  and 
comparing  Eule  1  of  the  second  and  final  treaties 
given  above,  no  open-minded  man  will  deny  the 
fullest  British  endorsement  of  the  fact  that  "na-*-^ 
tions ' '  as  therein  used  refers  to  all  other  nations 
except  the  United  States.  The  only  conclusion  is 
that  instead  of  asking  all  nations  to  agree  to  ob- 
serve these  rules  as  a  precedent  to  the  use  of  the 
Canal  by  the  vessels  of  such  nations,  we  adopt  the 
rules  and  require  all  nations  to  observe  them,  and 
under  circumstances  so  clearly  evidenced  by  the 
pourparlers  the  United  States  could  not  be  one  of 
"all  nations"  therein  referred  to. 

This  is  why  well  informed  English  diplomats 
leave  to  American  sympathizers  the  task  of  influ- 
encing the  American  public  mind  by  the  continued 
assertion  that  "all  nations"  includes  the  United 


40     Canal  Tolls  and  American  Shipping 

States  when  it  is  only  necessary  to  follow  the 
evolution  of  the  phrase  through  successive  treaties 
to  know  that  it  does  not. 

Senator  Eoot,  in  his  various  speeches,  refers  to 
the  views  of  our  past  statesmen  as  indicative  of 
our  policy  regarding  a  canal.  When  these  were 
given  everyone  contemplated  a  canal  through  alien 
territory  whose  Governments  were  weak.  If  we 
expected  European  countries  to  respect  the  sov- 
ereignty and  neutrality  of  the  land  of  such  coun- 
tries we  should  set  an  example  ourselves.  Con- 
ditions, as  he  very  well  knows,  are  entirely 
changed. 

A  careful  reading  of  the  Suez  Convention  given 
in  the  Appendix  will  show  the  care  exercised  in 
eliminating  every  expression  carried  over  to  the 
Hay-Pauncefote  Treaty  that  might  extend  equal 
treatment  to  ordinary  peaceful  commerce.  Just  as 
equal  treatment  in  all  the  operation  of  the  Canal 
was  covered  in  the  Clayton-Bulwer  Convention  so 
equal  treatment  except  for  Turkey  was  covered  in 
the  Suez  agreement. 

t/  Sir  Julian  Pauncefote  took  part  in  the  Suez 
conference — he  had  before  him  the  rules  of  Suez 
when  the  Hay-Pauncefote  Treaty  was  negotiated — 
if  he  were  safeguarding  equal  treatment  in 
peaceful  commerce  and  trying  in  phrasing  the 
rules  to  make  neutrality  signify  equal  treatment 
why  eliminate  every  intimation  of  such  treatment 
and  so  draw  the  rules  that  they  covered  conduct 
applying  only  to  belligerents?     Of  course,  this  is 


Neutrality  and  Equal  Treatment       41 

ignored,  but  knowing  that  Sir  Julian  Pauncefote 
was  most  familiar  with  the  rules,  let  us  quote  XII 
of  the  Suez  Convention  in  full : 

The  High  Contracting  Parties  by  application  of  the 
principle  of  equality  as  regards  the  free  use  of  the  Canal, 
a  principle  which  forms  one  of  the  bases  of  the  present 
treaty,  agree  that  none  of  them  shall  endeavor  to  obtain 
with  respect  to  the  Canal  territorial  or  commercial  ad- 
vantages or  privileges,  which  may  be  in  any  interna- 
tional arrangements  which  may  be  concluded.  More- 
over the  rights  of  Turkey  as  the  territorial  Power  are 
reserved. 

Here  was  a  precedent  for  the  use  of  the  prin- 
ciple of  equality — instead  we  find  used  in  the  Hay- 
Pauncefote  Treaty  principle  of  neutralization. 

Why  was  the  term  * '  principle  of  neutralization ' ' 
used?  It  was  to  place  the  United  States  in  a  class 
apart — the  Canal  is  not  neutralized  in  the  ordinary 
sense  of  the  term.  The  United  States  agrees  to 
hold  the  Canal  neutral  as  to  belligerents  in  wars 
in  which  she  is  not  concerned  and  reserves  all  the 
powers  necessary  to  enforce  such  neutrality  and 
assumes  all  the  obligation. 

Article  IX  of  the  Treaty  of  Vienna  which  pro- 
vides for  the  neutrality  of  the  free  town  of  Cra- 
cord  says  that  "no  armed  force  shall  be  intro- 
duced upon  any  pretense  whatever. ' ' 

In  the  Treaty  of  Paris,  neutralizing  the  Black 
Sea,  maintenance  of  armaments  was  prohibited. 
In  neutralizing  Luxemburg  there  was  a  provision 


42     Canal  Tolls  and  American  Shipping 

that  the  City  of  Luxemburg  should  no  longer  be 
treated  as  a  federal  fortress.  Article  III  of  the 
Treaty  of  London,  November  14,  1863,  neutraliz- 
ing the  Ionian  Islands  said:  "The  fortifications 
constructed  in  the  Island  of  Carfu,  having  no 
longer  any  object,  shall  be  demolished. ' '  The 
Berlin  Treaty  of  1878,  referring  to  the  neutraliza- 
tion of  the  Danube  said:  "all  the  fortresses  and 
fortifications  existing  on  the  course  of  the  river 
shall  be  razed  and  no  new  ones  erected." 

Yet  in  neutralizing  the  Panama  Canal  the  pro- 
hibition against  fortifications  is  omitted  by  mutual 

i  consent. 

^  In  other  words  there  is  a  distinct  departure  from 
the  true  neutrality  of  the  Clayton-Bulwer  Con- 
vention which  covered  a  canal  not  designed  for 
warlike  purposes.  % 

— ■  But  the  Suez  Canal  conditions  coming  up  in  the 
meantime  found  the  nations  of  Europe  having  pos- 
sessions in  the  East  unwilling  to  concur  in 
negotiating  a  treaty  forbidding  passage  by  the 
ships  of  a  belligerent,  so  a  more  extended  use  of 
the  term  neutralization  is  used  to  cover  the  case 
of  a  nation  in  armed  control  agreeing  to  hold  its 
canal  neutral  as  to  all  other  nations. 

Under  our  limited  form  of  Government  the 
Constitutional  warrant  for  constructing  the  Canal 
will  be  found  in  the  exercise  of  the  war  power  of 
the  United  States,  the  Canal  being  an  addition  to 
such  war  power. 


Neutrality  and  Equal  Treatment       43 

So  we  are  warranted  in  the  conclusion  that  if  the 
British  contention  is  to  stand  we  must  revise  that 
treaty  as  follows : — 

1.  That  Article  III  is  not  to  be  read  in  its  en- 
tirety but  if  any  rule  after  the  first  makes  the 
British  interpretation  absurd  all  such  sections 
must  be  suppressed. 

2.  That  the  preamble  to  Article  III  must  be  ig- 
nored as  it  specifically  states  that  these  rules  are 
for  securing  the  neutralization  of  the  Canal. 

3.  That  "neutralization"  must  not  receive  the 
definition  given  it  in  International  Law  or  the  lan- 
guage of  diplomacy,  as  such  definition  limits  its 
control  under  such  rules  to  time  of  war. 

4.  That  all  the  obligations  of  the  Clayton-Bul- 
wer  Treaty  must  be  carried  over  to  the  Hay- 
Pauncefote  Treaty,  although  the  former  is  super- 
seded by  the  latter. 

5.  That  the  negotiators  when  they  substituted 
the  " principle  of  neutralization"  for  the  "prin- 
ciple of  equality"  assumed  that  "neutralization" 
expressed  "equality"  more  clearly  than  "equal- 
ity" itself. 

Then  we  must  ignore : — 

1.  That  the  Clayton-Bulwer  Treaty  provided 
free  passage  for  all  vessels  during  peace  and  war, 
forbidding  discrimination. 

2.  That  the  Convention  of  Constantinople  did 
the  same  and  forbade  fortifications  as  well,  and 
forbade  any  attempt  to  restrict  the  free  use  of  the 


44     Canal  Tolls  and  American  Shipping 

Suez  Canal,  in  peace  or  war;  even  Turkey  if  at 
war  could  commit  no  act  of  hostility  within  its 
waters. 

3.  That  the  only  thing  in  common  to  the  Clay- 
ton-Bulwer  and  Hay-Pauncefote  pacts  is  the  idea 
of  neutralization. 

4.  That  Great  Britain  was  relieved  of  the  great 
burden  of  the  joint  guarantee  of  neutrality  and 
that  we  assumed  all  burdens  of  such  guarantee  as 
well  as  construction,  defense,  management  and 
regulation. 

5.  That  the  rules  of  the  Treaty  of  Constan- 
tinople were  radically  changed  and  only  such  parts 
as  provided  for  neutralization  were  retained  and 
all  references  to  equal  treatment  dropped. 

6.  That  from  such  rules  were  dropped  all  ideas 
of  prohibition  as  to  discrimination  during  time  of 
peace. 


CHAPTER  IV 

THE  NEGOTIATION  OF  THE  HAY- 
PAUNCEFOTE  TREATY 

On  February  5,  1900,  Mr.  Hay,  Secretary  of 
State,  and  Lord  Pauncefote,  British  Ambassador, 
signed  at  Washington  a  convention,  the  object  of 
which  was  declared  to  be  to  facilitate  the  construc- 
tion of  a  ship  canal  to  connect  the  Atlantic  and 
Pacific  Oceans  and  to  that  end  to  remove  any  ob- 
jection which  may  arise  out  of  the  Convention  of 
April  19,  1850,  commonly  called  the  Clayton-Bul- 
wer  Treaty,  to  the  construction  of  such  canal 
under  the  auspices  of  the  Government  of  the 
United  States,  without  impairing  the  general  prin- 
ciple of  neutralization  established  in  Article  VIIJ^ 
of  that  convention.  This  was  communicated  to 
the  Senate  by  President  McKinley  on  the  same 
day. 

The  Senate  gave  its  advice  and  consent  to  the 
Exchange  of  ratifications  with  certain  radical 
amendments.  The  Treaty  as  sent  to  the  Senate 
which  we  shall  call  No.  1  in  referring  to  it  was  as 
follows : — 

The  United  States  of  America  and  Her  Majesty  the 
Queen  of  the  United  Kingdom  of  Great  Britain  and  Ire- 

45 


46     Canal  Tolls  and  American  Shipping 

land,  Empress  of  India,  being  desirous  to  facilitate  the 
construction  of  a  ship  canal  to  connect  the  Atlantic  and 
Pacific  oceans,  and  to  that  end  to  remove  any  objection 
which  may  arise  out  of  the  Convention  of  April  19,  1850, 
commonly  called  the  Clayton-Bulwer  Treaty,  to  the  con- 
struction of  such  canal  under  the  auspices  of  the  Gov- 
ernment of  the  United  States,  without  impairing  the 
"general  principle "  of  neutralization  established  in 
Article  VIII  of  that  Convention,  have  for  that  purpose 
appointed  their  Plenipotentiaries. 

ARTICLE  I 

It  is  agreed  that  the  Canal  may  be  constructed  under 
the  auspices  of  the  Government  of  the  United  States, 
either  directly  at  its  own  cost,  or  by  gift  or  loan  of 
money  to  individuals  or  corporations  or  through  sub- 
scription to  or  purchase  of  stock  or  shares,  and  that, 
subject  to  the  provisions  of  the  present  Convention,  the 
said  Government  shall  have  and  enjoy  all  the  rights  inci- 
dent to  such  construction,  as  well  as  the  exclusive  right 
of  providing  for  the  regulation  and  management  of  the 
Canal. 

ARTICLE  II 

The  High  Contracting  Parties,  desiring  to  preserve 
and  maintain  the  "general  principle "  of  neutralization 
established  in  Article  VIII  of  the  Clayton-Bulwer  Con- 
vention, adopt,  as  the  basis  of  such  neutralization,  the 
following  rules,  substantially  as  embodied  in  the  Con- 
vention between  Great  Britain  and  certain  other  Pow- 
ers, signed  at  Constantinople,  October  29,  1888,  for  the 
Free  Navigation  of  the  Suez  Maritime  Canal,  that  is  to 
say: 

1.  The  Canal  shall  be  free  and  open,  in  time  of  war 


Negotiation  of  Hay-Pauncefote  Treaty     47 

as  in  time  of  peace,  to  the  vessels  of  commerce  and  of 
war  of  all  nations,  on  terms  of  entire  equality,  so  that 
there  shall  be  no  discrimination  against  any  nation  or 
its  citizens  or  subjects  in  respect  of  the  conditions  or 
charges  of  traffic,  or  otherwise. 

2.  The  Canal  shall  never  be  blockaded,  nor  shall  any 
right  of  war  be  exercised  nor  any  act  of  hostility  be 
committed  within  it. 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual 
nor  take  any  stores  in  the  Canal  except  so  far  as  may 
be  strictly  necessary;  and  the  transit  of  such  vessels 
through  the  Canal  shall  be  effected  with  the  least  pos- 
sible delay,  in  accordance  with  the  regulations  in  force, 
and  with  only  such  intermission  as  may  result  from  the 
necessities  of  the  service. 

Prizes  shall  be  in  all  respects  subject  to  the  same  rules 
as  vessels  of  war  of  the  belligerents. 

4.  No  belligerent  shall  embark  or  disembark  troops, 
munitions  of  war  or  warlike  materials  in  the  Canal  ex- 
cept in  case  of  accidental  hindrance  of  the  transit,  and 
in  such  case  the  transit  shall  be  resumed  with  all  possi- 
ble dispatch. 

5.  The  provisions  of  this  article  shall  apply  to  waters 
adjacent  to  the  Canal,  within  three  marine  miles  of 
either  end.  Vessels  of  war  of  a  belligerent  shall  not 
remain  in  such  waters  longer  than  twenty-four  hours 
at  any  one  time  except  in  case  of  distress,  and  in  such 
case  shall  depart  as  soon  as  possible ;  but  a  vessel  of  war 
of  one  belligerent  shall  not  depart  within  twenty-four 
hours  from  the  departure  of  a  vessel  of  war  of  the  other 
belligerent. 

6.  The  plant,  establishments,  buildings,  and  all  works 
necessary  to  the  construction,  maintenance  and  opera- 


48     Canal  Tolls  and  American  Shipping 

tion  of  the  Canal  shall  be  deemed  to  be  part  thereof,  for 
the  purposes  of  this  Convention,  and  in  time  of  war  as 
in  time  of  peace  shall  enjoy  complete  immunity  from 
attack  or  injury  by  belligerents  and  from  acts  calcu- 
lated to  impair  their  usefulness  as  part  of  the  Canal. 

7.  No  fortifications  shall  be  erected  commanding  the 
Canal  or  the  waters  adjacent.  The  United  States,  how- 
ever, shall  be  at  liberty  to  maintain  such  military  police 
along  the  Canal  as  may  be  necessary  to  protect  it  against 
lawlessness  and  disorder. 

ARTICLE  m 

The  High  Contracting  Parties  will,  immediately  upon 
the  exchange  of  the  ratifications  of  this  Convention, 
bring  it  to  the  notice  of  the  other  Powers  and  invite 
them  to  adhere  to  it. 

The  Senate  amendments  inserted  in  Article  II 
the  phrase  "which  convention  is  hereby  super- 
seded"; also  the  insertion  of  the  following  at  the 
end  of  Rule  5  in  Article  II : 

It  is  agreed,  however,  that  none  of  the  immediately 
foregoing  conditions  and  stipulations  in  sections  num- 
bered one,  two,  three,  four  and  five  of  this  article  shall 
apply  to  measures  which  the  United  States  may  find  it 
necessary  to  take  for  securing  by  its  own  forces  the 
defense  of  the  United  States  and  the  maintenance  of 
public  order. 

Article  III  was  entirely  stricken  out.  This 
draft  as  amended  was  not  satisfactory  to  Great 
Britain  though  if  it  had  been  accepted  much  of  her 
present  contention  would  have  held.    For  years 


Negotiation  of  Hay-Pauneefote  Treaty     49 

we  know  that  English  diplomacy  exerted  every 
means  to  extend  the  contract  stipulation,  the  joint 
contract  features  of  the  Clayton-Bulwer  Conven- 
tion, and  this  was  accomplished  in  this  first  drafts 
The  first  Hay-Pauncefote  Treaty  bound  us  hand 
and  foot  and  fastened  upon  the  United  States 
every  restriction  of  the  Clayton-Bulwer  Treaty. 
Happily  this  betrayal  of  the  rights  and  interests 
of  our  country  was  rejected  by  a  patriotic  Senate.^ 

Article  VIII  of  the  Clayton-Bulwer  Convention 
says  that  the  two  Governments  agree  to  extend 
their  protection  by  treaty  stipulations  to  any 
other  practical  route.  So  the  first  Hay-Paunce- 
fote Treaty  proposed,  while  purporting  to  re- 
move any  objection  to  the  building  of  the  Canal 
which  may  arise  out  of  the  Clayton-Bulwer  Con- 
vention, was  in  reality  an  adroitly  worded  supple- 
ment to  that  convention.  It  extended  by  treaty 
the  stipulated  joint  protection  by  which  equal 
treatment  was  to  be  secured  as  outlined  in  the  sec- 
ond paragraph  of  Article  VIII.  It  did  not  super- 
sede the  Clayton-Bulwer  Convention.  It  adopted 
rules  forbidding  discrimination  under  any  con- 
dition either  of  peace  or  war,  and  made  the  build- 
ing of  the  Canal  a  partnership  affair  in  which  the 
United  States  bore  all  the  burdens  and,  at  the 
same  time  through  the  limitations  incurred  under 
the  rules  of  Article  III,  barred  the  United  States 
from  enjoying  any  of  the  rights  incident  to  con- 
struction. 

Of  course  this  first  treaty  is  a  very  tender  sub- 


50     Canal  Tolls  and  American  Shipping 

ject  with  those  sympathizing  with  Great  Britain, 
but  the  gradual  shaping  of  the  betrayal  of  our 
country's  rights  and  interests  as  existing  in  the 
first  treaty  into  the  final  treaty  gives  us  a  ready 
means  of  finding  out  the  intent  of  the  last  treaty 
as  ratified  and  the  pourparlers  leading  to  the 
changes  show  plainly  the  acceptance  by  Great 
Britain  of  such  changes,  not  blindly,  but  with  per- 
fect understanding  of  their  purport. 

Mr.  Hay  communicated  the  amendments  made 
by  the  Senate  to  the  British  Government.  That 
Government  expressed  its  disapproval  of  the 
amended  treaty  and  Lord  Lansdowne  submitted  a 
new  draft  accepting  some  of  the  ideas  contended 
for  but  still  retaining  the  idea  of  the  extension  of 
contract  stipulations  and  joint  protection. 

Lord  Lansdowne  also  in  his  communication  of 
August  3,  1901,  showed  plainly  an  acceptance  of 
the  difference  in  the  neutral  conditions  of  the  Pan- 
ama Canal  as  compared  with  the  Clayton-Bulwer 
Canal.  He  pointed  out  that  Great  Britain's  obli- 
gation would  debar  her  from  "any  warlike  act  in 
or  around  the  Canal,  while  the  United  States 
would  be  able  to  resort  to  such  action  even  in  time 
of  peace  to  whatever  extent  they  might  deem  nec- 
essary to  secure  their  own  safety.' ' 

Mr.  Hay  put  the  case  in  this  way  in  his  explana- 
tion of  the  attitude  of  the  United  States : 

1.  That  there  should  be  in  plain  and  explicit  terms 
an  express  abrogation  of  the  Clayton-Bulwer  Treaty. 


Negotiation  of  Hay-Pauncefote  Treaty     51 

2.  That  the  rules  of  neutrality  adopted  should  not 
deprive  the  United  States  of  the  right  to  defend  itself 
and  to  maintain  public  order. 

3.  That  other  powers  should  not  in  any  manner  be 
made  parties  to  the  treaty  by  being  invited  to  adhere 
to  it. 

Certainly  a  radical  change  from  the  wording  of 
the  first  treaty. 

But  the  discussion  following  opened  the  eyes  of 
Senators  to  the  true  bearing  of  proposed  treaty 
provisions  and  determined  pruning  and  amend- 
ments followed  so  that  the  Treaty  as  finally 
adopted  was  absolutely  different  in  intent  from 
the  first  draft  submitted.  ^ 

What  conception  of  equal  treatment  could  be 
conjured  up  to  deprive  the  United  States  of  the 
right  to  use  the  Canal  as  a  part  of  (her  waij 
power  1  This  shows  very  plainly  that  the  neutra 
ity  considered  was  the  neutrality  always  meant 
by  men  versed  in  international  law  and  its  mean- 
ing and  that  it  was  not  in  any  way  to  be  confused 
with  equal  rights.  Mr.  Hay  in  this  connection 
explains  that  the  omission  of  the  words  "in  time 
of  war  as  in  time  of  peace"  is  that  this  "would 
give  to  the  United  States  the  clear  right  to  close 
the  Canal  against  the  other  belligerent  and  to  pro- 
tect and  defend  itself  by  whatever  means  may  be 
necessary.' '  If  we  are  to  assume  in  order  to  be 
in  accord  with  British  contention,  that  neutral 
rights  are  equal  treatment  then  even  the  privilege 


r 


52     Canal  Tolls  and  American  Shipping 

of  using  the  Canal  for  our  protection  is  held  on 
sufferance. 
Again  quoting  from  Mr.  Hay's  memorandum: 

In  conformity  with  the  Senate's  emphatic  rejection 
of  Article  III  of  the  former  treaty,  which  provided  that 
the  High  Contracting  Parties  would  immediately  upon 
the  exchange  of  ratifications,  bring  it  to  the  notice  of 
other  powers  and  invite  them  to  adhere  to  it,  no  such 
provision  was  inserted  in  the  draft  of  the  new  treaty. 

It  was  believed  that  the  declaration  that  the  Canal 
should  be  free  and  open  to  all  nations  on  terms  of  en- 
tire equality  (now  that  Great  Britain  was  relieved  of 
all  responsibility  and  obligation  to  enforce  and  defend 
its  neutrality)  would  practically  meet  the  force  of  the 
objection  which  had  been  made  by  Lord  Lansdowne  to 
the  Senate's  excision  of  the  article  inviting  the  powers 
to  come  in,  viz.,  that  Great  Britain  was  placed  thereby 
in  a  worse  position  than  other  nations  in  the  case  of  a 
war  with  the  United  States. 

In  other  words  the  express  desire  of  Great 
Britain  at  that  time  was  to  secure  the  same  treat- 
ment by  the  United  States  as  all  other  nations  in 
time  of  war  with  the  United  States. 

Explaining  the  omission  of  the  prohibition 
against  fortifications  from  the  new  treaty  Mr. 
Hay  says: 

The  whole  theory  of  the  Treaty  is  that  the  Canal  is  to 
be  an  entirely  American  Canal.  The  enormous  cost  of 
construction  is  to  be  borne  by  the  United  States  alone. 
When  constructed  it  is  to  be  exclusively  the  property 
of  the  United  States,  and  is  to  be  managed,  controlled 
and  defended  by  it.     Under  these  circumstances,  and 


Negotiation  of  Hay-Pauncefote  Treaty     53 

considering  that  by  the  new  treaty  Great  Britain  is  re- 
lieved of  all  responsibility  and  burden  of  maintaining 
its  neutrality  and  security,  it  was  thought  entirely  fair 
to  omit  the  prohibition  that  ''no  fortification  shall  be 
erected  commanding  the  Canal  or  the  waters  adjacent." 

And  yet  we  had  a  few  years  ago  Americans  bla- 
tantly protesting  against  fortifications  because  a 
rejected  treaty  forbade  them  and  accusing  our 
Government  of  breach  of  faith,  as  they  now  do 
on  the  toll  question. 

Again  discussing  the  verbal  changes  in  Section 
1  of  Article  III  wherein  the  British  very  adroitly 
labored  to  be  considered  as  having  a  contract 
right  in  the  Canal,  Mr.  Hay  says: 

He  (the  President)  believed  also  that  there  was  a 
strong  national  feeling  against  giving  to  the  other  pow- 
ers anything  in  the  nature  of  a  contract  right  in  an 
affair  so  peculiarly  American  as  the  Canal;  that  no 
other  powers  had  now  any  right  in  the  premises  to  give 
up  or  part  with  as  consideration  for  acquiring  such  con- 
tract right ;  that  they  are  to  rely  on  the  good  faith  of  the 
United  States  in  this  treaty;  and  that  it  adopts  the 
rules  and  principles  of  neutralization  there  set  forth. 
These  rules  are  adopted  in  the  Treaty  with  Great  Britain 
as  a  consideration  for  getting  rid  of  the  Clayton-Bulwer 
Treaty  and  the  only  way  in  which  other  nations  are  bound 
by  them  is  that  they  must  comply  with  them  if  they 
would  use  the  Canal. 

Upon  due  consideration  of  these  suggestions,  and  at 
the  same  time  to  put  all  the  powers  upon  the  same  foot- 
ing, viz.,  that  they  could  use  the  Canal  only  by  comply- 
ing' with  the  rules  of  neutrality  adopted  and  prescribed, 


54     Canal  Tolls  and  American  Shipping 

an  amendment  to  Lord  Lansdowne's  amendment  was 
proposed  and  agreed  upon. 

This  made  the  clause: 

The  Canal  shall  be  free  and  open  to  the  vessels  of 
commerce  and  war  of  all  nations  observing  these  rules 
on  terms  of  entire  equality,  so  that  there  shall  be  no 
discrimination  against  any  such  nation. 

Thus  the  whole  idea  of  contract  right  in  the 
other  powers  is  eliminated  and  the  vessels  of  any 
nation  which  shall  refuse  or  fail  to  observe  the 
rules  adopted  and  prescribed  may  be  deprived  of 
the  use  of  the  Canal.  And  please  note  that  the 
rules  are  to  be  observed — not  one  rule. 

Lord  Lansdowne  under  date  of  August  3,  1901, 
wrote : 

It  would  appear  to  follow  that  the  whole  responsibil- 
ity for  upholding  these  rules,  and  thereby  maintaining 
the  neutrality  of  the  Canal,  would  henceforward  be 
assumed  by  the  Government  of  the  United  States.  The 
change  of  form  is  an  important  one  but  in  view  of  the 
fact  that  the  whole  cost  of  construction  of  the  Canal 
is  to  be  borne  by  that  Government,  which  is  also  to  be 
charged  with  such  measures  as  may  be  necessary  to  pro- 
tect it  against  lawlessness  and  disorder,  His  Majesty's 
Government  is  not  likely  to  object  to  it. 

Sir  Edward  Grey  in  his  protest  seems  just  to 
have  awakened  to  this  view  of  his  predecessor. 
Again  quoting  the  same  memorandum: 

"While  indifferent  as  to  the  form  in  which  the  point 
is  met,  I  must  emphatically  renew  the  objections  of  His 
Majesty's  Government  to  being  bound  by  stringent  rules 


Negotiation  of  Hay-Pauncefote  Treaty     55 

of  neutral  conduct  not  equally  binding  upon  OTHER 
powers.  I  would  therefore  suggest  the  insertion  in  Rule 
1,  after  "all  nations"  of  the  words  "which  shall  agree 
to  observe  those  rules."  This  addition  will  impose  upon 
OTHER  powers  the  same  self-denying  ordinance  as 
Great  Britain  is  desired  to  accept,  and  will  be  an  addi- 
tional security  for  the  neutrality  of  the  Canal,  which  it 
will  be  the  duty  of  the  United  States  to  maintain. 

These  negotiations  clearly  show  the  recognition 
by  Great  Britain  of  the  United  States  as  the 
Sovereign  owner  and  sole  protector  of  the  Canal 
and  the  full  concession  of  our  right  to  provide 
for  its  regulation  and  management  and  that  Great 
Britain  was  making  sure  that  she  would  obtain 
equal  treatment  with  other  powers  observing  the 
rules  adopted  by  the  United  States  as  the  basis 
for  the  neutralization  of  the  Canal. 

This  is  the  meaning  of  the  "general  principle,, 
of  neutralization  established  by  Article  VIII  of 
the  Clayton-Bulwer  Treaty. 

How  can  any  unprejudiced  man  say  that  such 
principle  of  neutralization  could  be  impaired  by 
any  preference  the  United  States  might  see  fit  to 
extend  to  its  own  vessels  ?  Could  anyone  attempt 
to  say  to  a  body  of  intelligent  men  that  freeing 
our  own  vessels  from  tolls  would  in  any  way  dis- 
turb the  neutralization  of  the  Canal?  Can  any- 
one say  seriously  that  under  this  treaty  Great 
Britain  would  not  have  the  right  to  subsidize  her 
vessels  using  this  canal  or  repay  the  tolls  charged 
them  in  passage? 


56     Canal  Tolls  and  American  Shipping 

In  fact  would  it  not  be  impertinent  interference 
in  the  affairs  of  another  nation  for  this  Govern- 
ment to  dictate  the  policy  of  Great  Britain  or  any- 
other  nation  with  respect  to  their  shipping! 

But  blinded  by  sophistry  we  actually  find  men 
who  contend  that  we  cannot  rebate  tolls  to  our 
own  ships,  while  they  freely  extend  such  rebate 
privileges  to  other  nations. 

As  a  fact  it  is  not  our  affair  how  other  nations 
treat  their  vessels  and  after  we  have  discharged 
our  obligations  to  the  world  by  affording  equal 
tolls  and  according  equal  treatment  to  all  other 
nations,  their  citizens  and  subjects  that  observe 
the  rules  the  United  States  has  prepared  as  a 
precedent  to  their  use  in  furthering  the  principle 
of  neutralization,  we  are  free  to  extend  such  pref- 
erence as  we  like  to  our  vessels  in  their  use  of  a 
canal,  built,  owned  and  controlled  by  ourselves 
alone. 

The  basis  of  neutralization  adopted  by  the 
United  States  rests  on  the  modified  rules  of  the 
Convention  of  Constantinople  for  the  navigation 
of  the  Suez  Canal.  While  built  by  a  private  cor- 
poration the  Ottoman  Empire  exercised  sov- 
ereignty over  it  and  through  such  shadowy 
sovereignty  enjoys  preference  for  certain  of  its 
vessels.  This  fact  is  ignored  by  Sir  Edward 
Grey,  who  finding  no  comfort,  hies  him  back  to 
Clayton-Bulwer. 

We  know  that  a  number  of  the  signatory  powers 


Negotiation  of  Hay-Pauncefote  Treaty     57 

directly  rebate  tolls  collected  for  the  passage  of 
their  vessels,  and  most  of  them  do  so  indirectly. 
Their  right  to  do  so  has  passed  unchaF  aged,  yet 
my  tory  friends  in  this  argument  confront  us  with 
the  weird  contention  that  the  United  States  hav- 
ing adopted  these  rules  is  barred  from  doing  the 
very  things  that  other  nations,  parties  to  such 
convention,  have  done  and  are  doing. 

The  Eussian  Government  in  1909  appropriated 
650,000  roubles  in  exact  terms  to  pay  the  tolls  of 
the  merchant  steamers  of  the  Russian  Volunteer 
Fleet  both  for  tonnage  and  for  all  men,  women 
and  children  carried. 

The  British  P.  &  O.  Company  receives  in  sub- 
sidies enough  to  nearly  pay  all  its  canal  dues 
although  it  operates  through  the  Canal  a  number 
of  boats  apart  from  mail  steamers. 

The  North  German  Lloyd  receives  an  annual 
subsidy  on  its  vessels  using  the  Canal  of  $1,385,- 
000.  Japan  pays  a  subsidy  of  $1,336,947  to  the 
Nippon  Yusen  Kaisha  for  its  steamers  through 
the  Suez  to  Europe. 

The  Massageries  Maritimes,  the  largest  French 
Company  using  the  Suez  Canal  was  paid  for  its 
lines  to  China,  Japan,  Australia  and  Madagascar, 
$2,145,000  in  subsidies. 

Austria  specifically  provides  by  law  for  pay- 
ment of  Suez  tolls  on  Austrian  steamers  from 
Trieste  to  Bombay,  Calcutta  and  Kobe. 

The  Swedish  Government  calculates  its  subven- 


58     Canal  Tolls  and  American  Shipping 

tion  to  the  Svenska  Ostasiatiska  Kompaniet  to 
represent  the  amount  of  tolls  paid  by  the  ships  of 
the  Company  for  passing  the  Suez  Canal. 

So  that  the  powers  who  ratified  the  Convention 
of  Constantinople  directly  support  by  their  acts 
our  rights  under  the  Hay-Pauncefote  Treaty  to 
favor  our  own  shipping,  and  certainly  no  one  will 
contend  that  if  we  have  the  right  to  collect  the 
tolls  at  Panama  and  then  repay  them  that  we  have 
not  the  right  to  remit  them  in  the  first  instance. 
As  one  of  the  reports  of  Congress  on  this  ques- 
tion says : 

It  is  unnecessary  to  resort  to  a  device  or  subterfuge 
in  order  to  do  indirectly  what  we  have  a  right  to  do 
directly. 

Or  to  quote  President  Taf t  upon  this  question : 

If  there  is  no  "  difference  in  principle  between  the 
United  States  charging  tolls  to  its  own  shipping,  only  to 
refund  them,  and  remitting  tolls  altogether"  as  the 
British  protest  declares,  then  the  irresistible  conclusion 
is  that  the  United  States,  although  it  owns,  controls  and 
has  paid  for  the  Canal,  is  restricted  by  treaty  from 
aiding  its  own  commerce  in  the  way  that  all  the  other 
nations  of  the  World  may  freely  do.  If  it  is  correct 
to  assume  that  there  is  nothing  in  the  Hay-Pauncefote 
Treaty  preventing  Great  Britain  and  the  other  nations 
from  extending  such  favors  as  they  may  see  fit  to  their 
shipping  using  the  Canal,  and  doing  it  in  the  way  they 
see  fit,  and  if  it  is  also  right  to  assume  that  there  is  noth- 
ing in  the   Treaty  that  gives  the  United   States  any 


Negotiation  of  Hay-Pauncefote  Treaty     59 

supervision  over,  or  right  to  complain  of,  such  action, 
then  the  British  protest  leads  to  the  absurd  conclusion 
that  this  Government  in  constructing  the  Canal,  main- 
taining the  Canal  and  defending  the  Canal,  finds  itself 
shorn  of  the  right  to  deal  with  its  own  commerce  in  its 
own  way,  while  all  other  nations  using  the  Canal  in  com- 
petition with  American  commerce  enjoy  that  right  and 
power  unimpaired. 

The  British  protest  is  therefore  a  proposal  to  read 
into  the  Treaty  a  surrender  by  the  United  States  of  its 
right  to  regulate  its  own  commerce  in  its  own  way  and 
by  its  own  methods—a  right  which  neither  Great  Britain 
herself,  nor  any  other  nation  that  may  use  the  Canal, 
has  surrendered  or  proposes  to  surrender. 

The  surrender  of  this  right  is  not  claimed  to  be  in 
terms.  It  is  only  to  be  inferred  from  the  fact  that  the 
United  States  has  conditionally  granted  to  all  the  na- 
tions the  use  of  the  Canal  without  discrimination  by 
the  United  States  between  the  grantees;  but  as  the 
Treaty  leaves  all  nations  desiring  to  use  the  Canal  with 
full  right  to  deal  with  their  own  vessels  as  they  see  fit, 
the  United  States  would  only  be  discriminating  against 
itself  if  it  were  to  recognize  the  soundness  of  the  British 
contention. 

We  see  a  very  lively  appreciation  of  the  fact 
that  extension  of  joint  treaty  stipulation  is  eagerly 
sought  by  Great  Britain.  When  the  Treaty  in 
form  No.  1  was  not  found  acceptable  there  is  just 
the  same  persistent  attempt  to  retain  such  con- 
tract participation  in  later  drafts. 

Accepting  Mr.  Hay's  ideas  in  a  measure  we  find 


60     Canal  Tolls  and  American  Shipping 

that  on  August  3,  1901,  Lord  Lansdowne  sug- 
gested the  following  draft  as  being  acceptable  to 
the  British  Government  which  we  shall  call  No.  2. 
The  United  States  of  America  and  His  Majesty, 
the  King  of  the  United  Kingdom  of  Great  Britain 
and  Ireland,  etc.,  being  desirous  to  facilitate  the 
construction  of  a  ship  canal  to  connect  the  At- 
lantic and  Pacific  oceans,  and  to  that  end  to  re- 
move any  objection  which  may  arise  out  of  the 
Convention  of  the  19th  April,  1850,  commonly 
called  the  Clayton-Bulwer  Treaty,  to  the  construc- 
tion of  such  canal  under  the  auspices  of  the  Gov- 
ernment of  the  United  States,  without  impairing 
the  "general  principle  of  neutrality"  estab- 
lished in  Article  VIII  of  that  convention,  have 
for  that  purpose  appointed  their  plenipotentiar- 
ies. 

ARTICLE    I 

The  High  Contracting  Parties  agree  that  the 
present  treaty  shall  supersede  the  aforementioned 
convention  of  the  19th  April,  1850. 

ARTICLE   II 

It  is  agreed  that  the  Canal  may  be  constructed 
under  the  auspices  of  the  Government  of  the 
United  States,  either  directly  at  its  own  cost,  or 
by  gift  or  loan  of  money  to  individuals  or  corpora- 
tions, or  through  subscription  to  or  purchase  of 
stock  and  that  subject  to  the  provisions  of  the 
present  treaty,  the  said  Government  shall  have 
and  enjoy  all  the  rights  incident  to  such  construe- 


Negotiation  of  Hay-Pauncefote  Treaty     61 

tion,  as  well  as  the  exclusive  right  of  providing 
for  the  regulation  and  management  of  the  Canal. 

ARTICLE   III 

The  United  States  adopts,  as  the  basis  of  neu- 
tralization of  said  ship  canal,  the  following  rules, 
substantially  as  embodied  in  the  Convention  of 
Constantinople,  signed  the  28th  October,  1888,  for 
the  free  navigation  of  the  Suez  Canal,  that  is  to 
say: 

1.  The  Canal  shall  be  free  and  open  to  the  ves- 
sels of  commerce  and  of  war  of  all  nations  which 
shall  agree  to  observe  these  rules,  on  terms  of 
entire  equality,  so  that  there  shall  be  no  discrim- 
ination against  any  nation  so  agreeing,  or  its  cit- 
izens or  subjects,  in  respect  of  the  conditions  or 
charges  of  traffic,  or  otherwise.  Such  conditions 
and  charges  of  traffic  shall  be  just  and  equitable. 

2.  The  Canal  shall  never  be  blockaded,  nor  shall 
any  right  of  war  be  exercised,  nor  any  act  of  hos- 
tility be  committed  within  it.  The  United  States, 
however,  shall  be  at  liberty  to  maintain  such  mil- 
itary police  along  the  Canal  as  may  be  necessary 
to  protect  it  against  lawlessness  and  disorder. 

3.  Vessels  of  war  of  a  belligerent  shall  not  re- 
victual  nor  take  any  stores  in  the  Canal  except  so 
far  as  may  be  strictly  necessary;  and  the  transit 
of  such  vessels  through  the  Canal  shall  be  effected 
with  the  least  possible  delay  in  accordance  with 
the  regulations  in  force,  and  with  only  such  inter- 
mission as  may  result  from  the  necessities  of  the 


62     Canal  Tolls  and  American  Shipping 

service.  Prizes  shall  be  in  all  respects  subject 
to  the  same  rules  as  vessels  of  war  of  the  belliger- 
ents. 

4.  No  belligerent  shall  embark  or  disembark 
troops,  munitions  of  war,  or  warlike  materials  in 
the  Canal  except  in  case  of  accidental  hindrance 
of  the  transit,  and  in  such  case  the  transit  shall 
be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  article  shall  apply  to 
waters  adjacent  to  the  Canal  within  3  marine 
miles  of  either  end.  Vessels  of  war  of  a  belliger- 
ent shall  not  remain  in  such  waters  longer  than 
24  hours  at  any  one  time  except  in  case  of  dis- 
tress, and  in  such  cases  shall  depart  as  soon  as 
possible,  but  a  vessel  of  war  of  one  belligerent 
shall  not  depart  within  24  hours  from  the  de- 
parture of  a  vessel  of  war  of  the  other  belliger- 
ent. 

6.  The  plants,  establishments,  buildings  and  all 
works  necessary  to  the  construction,  maintenance 
and  operation  of  the  Canal  shall  be  deemed  to  be 
part  thereof  for  the  purposes  of  this  treaty,  and 
in  time  of  war,  as  in  time  of  peace,  shall  enjoy 
complete  immunity  from  attack  or  injury  by 
belligerents  and  from,  acts  calculated  to  impair 
their  usefulness  as  part  of  the  Canal. 

AETICLE    III-A 

In  view  of  the  permanent  character  of  this 
treaty,  whereby  the  general  principle  established 
by  Article  VIII  of  the  Clayton-Bulwer  Conven- 


Negotiation  of  Hay-Pauncefote  Treaty    63 

tion  is  reaffirmed,  the  high  contracting  parties 
hereby  declare  and  agree  that  the  rules  laid  down 
in  the  last  preceding  article,  shall  so  far  as  they 
may  be  applicable,  govern  all  interoceanic  com- 
munications across  the  Isthmus  which  connects 
North  and  South  America,  and  that  no  change  of 
territorial  sovereignty,  or  other  change  of  cir- 
cumstances shall  affect  such  general  principle,  or 
the  obligations  of  the  high  contracting  parties  un- 
der the  present  treaty. 

It  will  be  noted  that  the  United  States  now 
adopts  the  rules  instead  of  Great  Britain  and  the 
United  States  together.  What  steps  shall  Great 
Britain  take  to  secure  a  contract  participation? 
You  will  note  in  Eule  1  of  Treaty  No.  2  that  the 
Canal  is  to  be  held  free  and  open  to  the  vessels  of 
commerce  and  of  war  of  all  nations  il  which  shall 
agree  to  observe  those  rules." 

Later  we  find  the  suggestion  that  the  two  con- 
tracting parties  shall  bring  such  rules  to  the  at- 
tention of  other  powers  and  invite  their  adher- 
ence. The  invitation  and  its  acceptance  would 
naturally  constitute  a  contract  and  the  claim 
would  very  certainly  follow.  Mr.  Hay  stated 
that  there  would  be  strong  opposition  ' '  to  inviting  ^ 
other  powers  to  become  contract  parties  to  a 
treaty  affecting  the  Canal."  This  ingenious  at- 
tempt was  abandoned  as  soon  as  it  was  seen  that 
its  purpose  was  understood.  So  there  was  sub- 
stituted for  the  words  "the  Canal  shall  be  free 
and  open  to  the  vessels  of  commerce  and  of  war  of 


64     Canal  Tolls  and  American  Shipping 

all  nations  which  shall  agree  to  observe  these 
rules"  the  words  " the  Canal  shall  be  free  and  open 
to  the  vessels  of  commerce  and  of  war  of  all  na- 
tions observing  these  rules,"  and  instead  of 
"any  nation  so  agreeing"  the  words  "any  such 
nation. ' ' 

Not  securing  the  extension  of  joint  protection 
upon  which  to  claim  equal  treatment  to  what 
would  a  negotiator  turn  in  order  to  secure  such 
treatment. 

It  will  be  noted  in  Article  II  of  the  final  treaty 
that  we  are  to  have  full  powers  of  management 
and  regulation. 

The  omission  of  the  words  "in  time  of  peace  as 
in  time  of  war"  confined  the  application  of  the 
rules  to  neutral  conditions.  Was  there  any  way 
to  broaden  such  application  and  at  the  same 
time  to  attempt  again  to  secure  contract  joint 
protection  through  treaty  stipulation?  Let  us  re- 
peat Article  III-A,  suggested  by  Lord  Lans- 
downe : 

In  view  of  the  permanent  character  of  this  treaty, 
whereby  the  general  principle  established  by  Article 
VIII  of  the  Clayton-Bulwer  Convention  is  reaffirmed, 
the  high  contracting  parties  hereby  declare  and  agree 
that  the  rules  laid  down  in  the  last  preceding  article, 
shall,  so  far  as  they  may  be  applicable,  govern  all  inter- 
oceanic  communications  across  the  Isthmus  which  con- 
nects North  and  South  America,  and  that  no  change  of 
territorial  sovereignty,  or  other  change  of  circumstances 
shall  affect  such  general  principle  or  the  obligations  of 
the  high  contracting  parties  under  this  present  treaty. 


Negotiation  of  Hay-Pauncefote  Treaty    65 

Did  we  accept  this?  Not  at  all.  Consistent 
with  the  firm  principle  of  refusing  direct  or 
indirect  efforts  to  secure  equal  treatment  with 
U.  S.  vessels  or  to  invalidate  Article  II  vesting 
in  us  the  enjoyment  of  the  rights  incident  to  con- 
struction it  was  changed  to  the  following  appear- 
ing as  Article  IV  in  the  Hay-Pauncefote  Treaty : 

It  is  agreed  that  no  change  of  territorial  sovereignty 
or  the  international  relations  of  the  country  or  coun- 
tries traversed  by  the  before  mentioned  Canal  shall  ef- 
fect the  general  principle  of  neutralization  or  the  obli- 
gations of  the  high  contracting  parties  under  present 
treaty. 

Lord  Lansdowne  explains  his  consent  to  this 
change  by  saying  that  Mr.  Hay  contended  that  the 
general  principle  of  neutrality  was  already  men- 
tioned in  the  preamble  and  that  to  reiterate  the 
idea  in  still  stronger  language  and  to  give  Article 
VIII  of  the  Clayton-Bulwer  Convention  what 
seemed  a  wider  application  than  it  originally  had 
would  not  meet  with  acceptance  by  the  United 
States.  Mr.  Hay  never  intended  that  the  rules 
for  conserving  neutrality  should  govern  all  "in- 
teroceanic  communications"  and  naturally  re- 
fused to  permit  any  such  idea  to  find  lodgment  in 
the  Treaty. 

While  the  phrase  is  ambiguous,  at  any  rate  it 
was  omitted  and  the  application  of  the  rules  was 
confined  to  the  limitations  of  Article  III. 

It  shows  the  care  of  Mr.  Hay  in  limiting  the 


66     Canal  Tolls  and  American  Shipping 

possibility  of  double  meaning  and  amplification 
of  the  vague  indefinite  and  embarrassing  obliga- 
tions of  Article  VIII. 

Besides  this  we  did  not  permit  Great  Britain 
to  succeed  in  the  attempt  to  adopt  the  rules 
jointly  with  us  after  refusing  it  in  Article  III, 
wherein  the  United  States  adopts  the  rules  alone, 
as  we  see  the  appearance  of  the  High  Contracting 
parties  adopting  the  agreement  cut  out.  Now  let 
us  consider  the  Treaty  in  its  final  form.  (See  Ap- 
pendix.) 

The  Literary  Digest  of  December  22,  1900 
states : 

The  temper  of  the  Senate  was  first  made  evident  by 
its  adoption  of  the  Davis  amendment  (passed  by  a  vote 
of  65  to  17)  permitting  measures  which  the  United  States 
may  find  necessary  to  take  for  securing,  by  its  own 
forces,  the  defense  of  the  United  States  and  the  main- 
tenance of  public  order. 

Two  other  amendments  were  proposed  by  Senator 
Foraker  and  accepted  by  the  Committee  on  Foreign  Re- 
lations, the  first  declaring  that  the  Clayton-Bulwer 
Treaty  is  hereby  superseded  and  the  other  eliminating 
Article  III,  which  provided  that  the  other  powers  should 
be  invited  to  adhere  to  the  Treaty. 

The  great  wisdom  of  referring  treaties  to  the 
Senate  is  demonstrated  by  the  radical  changes 
made  in  the  Treaty  from  the  form  in  which  it  was 
at  first  negotiated,  signed  and  submitted  to  the 
Senate. 

The  writer  feels  that  the  first  treaty  in  no  way 


Negotiation  of  Hay-Pauncefote  Treaty     67 

safe-guarded  the  interests  of  the  United  States. 
A  good  deal  of  the  general  misconception  of  the 
real  meaning  of  the  Treaty  lies  in  the  fact  that  a 
number  of  our  public  men  get  their  impressions 
of  the  Treaty  from  this  earlier  form  and  have  not 
followed  its  careful  redrafting.  In  1913  in  speak- 
ing in  answer  to  Mr.  Choate  at  a  Chamber  of 
Commerce  meeting  the  writer  said: 

Read  standard  treatises  on  International  laws  of  Eng- 
land or  any  other  country  and  you  will  find  neutrality 
defined  as  a  condition  existing  during  time  of  war ;  that 
neutral  obligations  cannot  hold  until  actual  war  has  be- 
gun. Therefore  if  we  have  rules  for  conserving  the 
neutrality  of  the  Canal,  they  are  for  the  purpose  of 
application  to  those  who  are  belligerent. 

Mr.  Joseph  H.  Choate  here  interrupted  the 
writer's  address  saying: 

"The  Treaty  says  'in  times  of  peace  and  war.'  " 
To  which  the  writer  replied: — 

I  beg  your  pardon,  Mr.  Choate,  you  are  mistaken. 
The  Hay-Pauncefote  Treaty  says  no  such  thing  as  these 
words  were  stricken  from  the  first  Hay-Pauncefote 
Treaty  by  the  Senate  as  it  whipped  that  betrayal  of 
American  rights  into  acceptable  shape. 

Mr.  Choate  did  not  follow  the  subject  further 
but  his  opinion  that  the  Treaty  confers  equal 
rights  has  spread  throughout  the  country. 

Historical  facts  should  not  be  stated  in  mincing 
words. 

In  1891,  long  after  Mr.  LowelPs  communication 


68     Canal  Tolls  and  American  Shipping 

had  been  made,  the  Senate  Committee  on  Foreign 
Belations  of  the  51st  Congress  took  np  the  inves- 
tigation of  the  Clayton-Bnlwer  Convention  and 
nnanimonsly  stated  their  conviction  that  we  were 
fully  at  liberty  to  proceed  in  any  way  we  saw  fit 
to  promote  the  construction  of  an  Isthmian  Canal. 
The  Committee  was  made  up  of  such  conserva- 
tive and  capable  men  and  was  composed:  John 
Sherman,  Chairman,  George  Edmunds,  William 
P.  Frye,  William  Evarts,  J.  N.  Dolph,  John  T. 
Morgan,  Joseph  E.  Brown,  H.  B.  Payne,  J.  B. 
Eustis. 

Conditions  were  such  that  the  United  States 
eould  no  longer  be  bound  by  the  Clayton-Bulwer 
Convention,  we  were  justified  in  denouncing  it  by 
the  flagrant  violations  of  Great  Britain  and  there 
was  a  growing  sentiment  favoring  its  termination. 
All  the  precedents  and  practices  confirm  our 
right  to  have  done  so.  But  we  were  loath  to 
exercise  such  right.  Great  Britain  really  gave 
up  nothing  except  a  right  of  mere  obstruction  for 
all  other  rights  claimed  by  her  as  to  us  were  in 
violation  of  the  Monroe  Doctrine  and  the  Clay- 
ton-Bulwer Treaty. 

I  was  a  delegate  to  the  Kansas  City  Convention 
of  1900  and  there  the  Democratic  Party  Platform 
denounced  the  first  treaty  as  follows : 

We  condemn  the  Hay-Pauncefote  Treaty  as  a  sur- 
render of  American  rights  and  interests  not  to  be  tol- 
erated by  the  American  people. 


Negotiation  of  Hay-Pauncefote  Treaty     69 

The  discussion  of  the  first  Hay-Pauncefote 
Treaty  under  the  mature  and  capable  criticism  of 
the  Senate  showed  how  we  had  simply  extended 
the  Clayton-Bulwer  Convention's  outlawed  and 
violated  provisions  and  validated  them. 

Senator  Foraker  referring  to  this  feeling  says : 

I  happen  to  know  that  Mr.  Hay  was  familiar  with  this 
situation,  and  this  sentiment  and  purpose.  Doubtless 
the  British  Government  had  the  same  knowledge.  At 
any  rate  negotiations  were  suddenly  renewed  with  the 
result  that  on  the  fourth  day  of  December,  1901,  Presi- 
dent Roosevelt  sent  to  the  Senate  what  is  known  as  the 
second  Hay-Pauncefote  Treaty.  . 

Yet  every  gain  made  in  the  shaping  of  the  first 
into  the  final  treaty  as  now  existing  is  lost  if  we 
admit  that  neutrality  means  equal  treatment  and 
that  under  the  Treaty  the  rules  for  conserving 
neutrality  must  govern  all  conditions  of  com- 
merce in  peace  and  war  and  without  regard  to 
belligerency,  which  is  what  we  refused  to  do  in 
the  Hay-Lansdowne  negotiations.  s 


CHAPTER  V 
INSINCERITIES 

The  writer  has  been  criticised  for  saying  that 
he  has  not  read  a  single  sincere  argument  in  fa- 
vor of  the  English  contention. 

Let  us  quote  from  the  speech  of  a  well-known 
statesman  in  which  he  says : 

The  merest  schoolboy  can  pass  upon  the  question.  I 
am  going  to  read  you  two  clauses  and  I  should  like  to 
challenge  any  member  to  show  how  they  can  possibly 
be  reconciled: 

"The  Canal  shall  be  free  and  open  to  the  vessels  of 
commerce  and  war  of  all  nations  on  terms  of  entire 
equality,  so  that  there  shall  be  no  discrimination  against 
any  such  nation  or  its  citizens  or  subjects  in  respect  of 
the  conditions  or  charges  of  traffic  or  otherwise.' ' 

That  is  what  the  Treaty  says : 

In  the  Canal  Bill  the  clause  is : 

"No  tolls  shall  be  levied  upon  vessels  engaged  in  the 
coastwise  trade  of  the  United  States." 

Can  you  put  these  two  things  together  and  reconcile 
them  in  any  possible  way  f  Of  course,  it  is  an  utter  im- 
possibility. 

And  just  such  argument  is  spread  broad-cast. 
Men  are  not  sincere  in  argument  when  they  take 
from  the  body  of  a  treaty  a  qualified  and  limited 

70 


Insincerities  71 

clause  and  endeavor  to  have  our  people  believe 
that  it  stands  as  an  unqualified  obligation  and 
our  people  are  being  misled  throughout  our  coun- 
try by  such  misrepresentation.  The  men  who  do 
this  know  very  well  the  true  definition  and  appli- 
cation of  neutrality.  They  know  that  if  the  rules 
were  for  securing  the  neutrality  of  the  Canal  that 
even  without  definite  power  given  we  should  have 
the  right  to  regulate  the  ordinary  peaceful  com- 
merce in  our  own  way — yet,  they  ignore  the  broad 
powers  given  in  Article  II.  This  I  claim  is  in- 
sincere. 

Then  we  have  what  is  known  as  the  Bard  resolu- 
tion. During  the  discussion  of  the  Treaty  Sena- 
tor Bard  offered  the  following  resolution: — 

The  United  States  reserves  the  right  in  the  regulation 
and  management  of  the  Canal  to  discriminate  in  respect 
of  the  charges  of  traffic  in  favor  of  vessels  of  its  own 
citizens  engaged  in  the  coast-wise  trade. 

Senator  Koot,  and  those  who  base  their  view  of 
the  Treaty  upon  his  speech  spread  broadcast, 
said: 

I  say,  the  Senate  rejected  that  amendment  upon  this 
report  which  declared  the  rule  of  universal  equality 
without  any  preference  or  discrimination  in  favor  of  the 
United  States,  as  being  the  meaning  of  the  Treaty  and 
the  necessary  meaning  of  the  Treaty. 

Yet,  when  Senator  Eoot  made  this  statement 
he  knew  and  his  followers  know  when  they  pass 
along  his  arguments  that  Senator  Bard  had  said 


72     Canal  Tolls  and  American  Shipping 

over  his  own  signature  in  a  letter  to  Congressman 
Knowland  read  upon  the  floor  of  the  House,  that 
when  his  amendment  was  under  consideration  it 
was  generally  conceded  by  Senators  that  without 
his  specific  amendment  the  rules  of  the  Treaty  did 
not  prevent  discrimination  and  hence  the  Bard 
resolution  was  considered  superfluous  by  his  col- 
leagues. 

Now  let  us  note  that  at  the  same  time  and  by 
the  same  vote  a  resolution  providing  for  fortifica- 
tions was  voted  down  because  it  too  was  con- 
sidered superfluous.  Mr.  Hay  reflects  the  very 
decided  opinion  of  the  Senate  in  refusing  to 
ratify  a  treaty  that  forbade  fortification. 

Senator  Lodge  who  reported  the  Treaty  in  the 
Senate  says  it  does  not  bar  preference  for  our 
own  vessels.  President  Eoosevelt  who  promul- 
gated the  Treaty  says  it  does  not  bar  such  prefer- 
ence. President  Taft  declares  we  have  full 
powers  to  prefer  our  own  vessels. 

After  the  rejection  of  the  first  treaty  by  the 
Senate,  Mr.  Hay  said  that  he  feared  he  could  not 
negotiate  a  treaty  that  would  be  confirmed  but 
Senator  Foraker  told  him  that  a  treaty  supersed- 
ing the  Clayton-Bulwer  Treaty,  doing  away  with 
all  partnership  and  permitting  fortifications 
would  doubtless  prove  acceptable  and  a  treaty 
was  negotiated  along  such  lines. 

Senator  Foraker  says : 

According  to  my  recollections  this  very  question  (of 


Insincerities  73 

right  to  discriminate  in  favor  of  our  own  ships)  was 
raised  by  an  amendment  offered  to  the  Treaty  which 
amendment  was  voted  down  overwhelmingly  because  it 
was  thought  unnecessary  to  specify  that  a  provision  of 
such  a  character  did  not  apply  to  us  who  were  building 
the  Canal,  and  were  to  have  with  respect  to  it,  the  usual 
rights  of  ownership  and  all  the  rights  of  regulation. 

Who  best  interprets  the  intent  of  the  Senate 
at  the  time,  Senator  Foraker  who  aided  in  the  de- 
velopment of  an  acceptable  treaty,  or  Senator 
Eoot  who  did  not  take  his  seat  in  that  body  till 
years  after! 

But  the 'evidence  is  not  confined  to  one  man  nor 
a  dozen  men.  A  few  months  ago  Senator  Towne, 
who  was  in  the  Senate  at  the  time  wrote  me : 

There  is  not  the  slightest  doubt  in  the  world  that  your 
impression  as  to  the  understanding  originally  prevalent 
among  the  members  of  the  Senate  in  regard  to  the  right 
of  the  United  States  under  the  Hay-Pauncefote  Treaty, 
to  discriminate  in  favor  of  its  own  ships,  is  correct. 

If  Senators  who  have  thus  testified,  and  I  have 
quoted  men  of  both  parties,  who  understood  the 
Treaty  at  the  time  and  who  understood  as  the  re- 
sult of  critical  study  and  discussion  the  essential 
differences  between  the  second  treaty  as  ratified 
and  the  first  treaty  as  submitted  for  ratification, 
are  not  the  judges  of  what  they  meant,  to  whom 
must  we  apply?  Yet  Senator  Root  and  others 
uses  this  unfair  deduction  from  Senate  proceed- 
ings in  all  his  speeches  and  continues  to  use  it 
after  their  attention  is  called  to  his  error. 


74     Canal  Tolls  and  American  Shipping 

Am  I  in  error  in  saying  such  arguments  are  in- 
sincere f 

Similarly  we  find  a  favorite  argument  to  be  the 
quoting  of  Canadian  Treaties  providing  in  explicit 
and  definite  terms  for  absolute  equality  in  respect 
of  rules,  regulations  and  tolls  upon  either  Ameri- 
can or  Canadian  vessels  in  the  canal  and  water 
system  of  the  Great  Lakes.  When  Canada  in  con- 
travention of  this  explicit  agreement  granted  a 
rebate  so  as  to  reduce  Canadian  charges  from 
twenty  cents  to  two  cents  the  United  States  ob- 
jected. 

Yet  for  twenty-one  years,  in  spite  of  our  ob- 
jections, Canada  was  supported  in  her  dis- 
crimination and  it  was  only  after  President 
Cleveland  advised  retaliatory  legislation  that  the 
rebates  in  favor  of  Canadian  vessels  were  sus- 
pended. 

But  the  crowning  act  of  insincerity  is  that  of 
spreading  the  idea  that  we  are  false  to  treaty 
obligations. 

The  very  men  who  for  political  advantage  give 
currency  to  such  untruth  know  that  our  people 
are  very  sensitive  to  attacks  upon  the  national 
honor  and  so  appeal  to  this  sentiment  for  selfish 
ends. 

No  nation  has  suffered  more  than  this  for  blind 
adherence  to  treaties  and  conventions  evaded  and 
violated  by  others. 

Senator  Lodge  in  a  speech  in  the  U.  S.  Senate 
April  9,  1914,  said: 


Insincerities  75 

We  have  scrupulously  observed  our  international 
agreements  and  where  differences  have  arisen  we  have 
settled  them  not  with  the  high  hand  of  power  but  by 
negotiation  and  arbitration. 

Yet  the  appeal  to  our  people  on  this  question  of 
tolls  wanting  logical  support  is  sought  to  be 
gained  by  misrepresenting  the  sentiment  and 
policy  of  our  people  before  the  world.  We  shall 
conserve  a  decent  respect  for  the  opinions  of  man- 
kind as  well  by  asserting  our  treaty  rights  as  by 
standing  fast  to  treaty  obligations. 


CHAPTER  VI 
THE  SPEECH  OF  SENATOR  ELIHU  ROOT  1 

This  speech  was  delivered  in  the  Senate  on 
January  21,  1913.  It  has  been  sent  to  all  parts 
of  the  country,  being  printed  by  the  Peace  So- 
ciety and  mailed  under  Government  frank. 

The  high  standing  and  distinguished  public 
service  of  its  author  naturally  give  it  great  weight 
and  it  has  been  the  cause  of  much  misunderstand- 
ing upon  this  important  matter. 

As  to  his  statement  about  the  exhaustion  of  the 
members,  and  the  Treaty  being  considered  by  very 
few  members,  we  must  remember  that  much  is 
done  in  Committee  and  that  the  discussion  excited 
the  liveliest  interest  and  the  records  do  not  bear 
out  his  statements  as  to  meager  attendance  nor  as 
to  vigor  in  discussion. 

As  to  the  pretensions  of  Great  Britain  in  Cen- 
tral America,  history  does  not  endorse  the  right- 
eousness of  her  cause  so  fully  as  Senator  Root 
and  while  he  quotes  very  fully  what  Great  Britain 
engaged  not  to  do  in  Central  America  the  reader 
will  note  very  careful  omission  to  state  that  Great 
Britain  continued  to  violate  the  provisions  of  the 
Clayton-Bulwer  Convention. 

i  This  speech  is  given  in  the  Appendix. 

76 


The  Speech  of  Senator  Elihu  Eoot     77 

We  must  remember  that  in  this  speech  Senator 
Root  endeavors  to  justify  England's  claim  of 
equal  treatment.  As  there  can  be  no  ground 
found  for  such  claim  in  the  Hay-Pauncefote 
Treaty  both  Senator  Root  and  Sir  Edward  Grey 
harken  back  to  the  Clayton-Bulwer  Convention 
just  as  if  it  were  in  full  force. 

Senator  Root  says  that  Article  VIII  is  the  ' '  ex- 
plicit agreement  for  equality  of  treatment  to  the 
citizens  of  the  United  States  and  the  citizens  of 
Great  Britain  in  any  canal  wherever  it  may  be 
constructed  across  the  Isthmus.' '  He  omits  to 
state  the  equality  of  treatment  is  obtained  through 
joint  protection  extended  by  treaty  stipulation. 

We  find  Senator  Root  then  drawing  a  parallel 
as  to  equality  of  treatment  in  American  and 
Canadian  Canals.  It  is  true  that  explicit  pro- 
visions for  equal  treatment  were  contained  in  the 
Treaty  of  1871.  It  is  true  also  as  stated  else- 
where and  Senator  Root  knows  it  that  we  did  not 
get  such  equal  treatment,  though  we  constantly 
demanded  it  from  Great  Britain  till  twenty-one 
years  later  when  President  Cleveland  inspired 
drastic  retaliatory*  legislation  to  force  Great 
Britain's  long  and  deliberate  evasion  of  a  direct 
and  explicit  treaty  obligation.  We  search  in  vain, 
however,  for  any  of  the  clear  provisions  found 
in  the  Great  Lakes  waterways  treaties  for  equal 
treatment  in  the  Hay-Pauncefote  Treaty. 

It  has  been  pointed  out  in  another  chapter  how 
Senator  Root  goes  counter  to  all  the  ideas  of  pub- 


78     Canal  Tolls  and  American  Shipping 

lie  law  in  saying  that  the  provisions  of  the  Treaty 
of  1846  had  to  be  subordinated  to  the  Clayton- 
Bulwer  Convention.  It  is  just  the  opposite  and 
the  strenuous  attempts  to  obtain  participation  in 
such  Treaty  of  1846  by  Great  Britain  and  the 
steadfast  refusal  of  our  statesmen  to  grant  such 
participation  are  a  part  of  our  country's  history. 
It  is  to  be  regretted  that  Senator  Root  draws  an 
entirely  misleading  conclusion  from  Secretary 
Olney 's  memorandum  of  1896.  He  quotes  Secre- 
tary Olney  as  follows : 

If  changed  conditions  now  make  stipulations  which 
were  once  deemed  advantageous,  either  inapplicable  or 
injurious,  the  true  remedy  is  not  an  ingenious  attempt 
to  deny  the  existence  of  the  Treaty  or  to  explain  away 
its  provisions,  but  in  a  direct  and  straightforward  ap- 
plication to  Great  Britain  for  a  reconsideration  of  the 
whole  matter. 

And  then  Senator  Root  says : 

We  did  apply  to  Great  Britain  for  a  reconsideration 
of  the  whole  matter,  and  the  result  of  the  application 
was  the  Hay-Pauncefote  Treaty. 

Of  course,  everyone  knows  that  the  reconsidera- 
tion suggested  by  Mr.  Olney  was  not  such  as  gave 
rise  to  the  Hay-Pauncefote  Treaty  the  burden  of 
the  Olney  memorandum  being  that  since  we  had 
for  many  years  put  up  with  violation  of  the  Clay- 
ton-Bulwer  Convention  and  had  not  abrogated  it 
the  Treaty  should  be  considered  as  in  effect. 

President  McKinley  stated  the  real  needs  of 


The  Speech  of  Senator  Elihu  Root     79 

the  situation  in  his  message  of  December  5th, 
1898,  in  which  he  said : 

That  the  construction  of  such  a  marine  highway  is 
now  more  than  ever  indispensable  to  that  intimate  and 
ready  intercommunication  between  our  eastern  and 
western  seaboards  demanded  by  the  annexation  of  the 
Hawaiian  Islands  and  the  prospective  extension  of  our 
influence  and  commerce  in  the  Pacific,  and  that  our  na- 
tional policy  now  more  imperatively  than  ever  calls  for 
its  CONTROL  by  this  Government,  are  propositions 
which  I  doubt  not  that  Congress  will  duly  appreciate 
and  wisely  act  upon. 

While  Senator  Eoot  quotes  that  our  Govern- 
ment shall  have  and  enjoy  all  rights  incident  to 
construction,  as  well  as  the  exclusive  right  of  pro- 
viding for  the  regulation  and  management  of  the 
Canal,  his  advice  leads  to  relinquishment  of  all 
rights  incident  to  construction  and  the  limitation 
of  regulation  and  management  to  the  rules  for 
conserving  neutrality  and  that  these  rules  must 
apply  to  ordinary  commerce,  ignoring  entirely 
Article  II. 

Then  again  he  says : 

The  principle  of  neutralization  provided  for  by  the 
eighth  article  is  neutralization  upon  terms  of  absolute 
equality  both  between  the  United  States  and  Great 
Britain  and  between  the  United  States  and  all  other 
powers. 

Here  we  see  an  abandonment  of  the  CONTROL 
considered  indispensable  by  President  McKinley 


80     Canal  Tolls  and  American  Shipping 

and  the  doctrine  that  we  cannot  use  the  Canal  to 
our  own  advantage  in  time  of  war  in  which  we  are 
engaged.  And  these  un-American  conclusions 
are  advanced  to  bolster  up  a  weak  stand  taken  on 
weak  premises. 

He  glides  quickly  over  the  fact  that  there  were 
several  drafts  submitted  omitting  to  mention  that 
the  changes  from  the  first  draft  and  the  gradual 
shaping  of  the  final  treaty  opened  the  eyes  of  the 
Senate  to  the  fact  that  the  first  treaty  was  a  be- 
trayal of  our  country's  interests  and  a  reversal  of 
a  policy  of  refusal  to  admit  others  to  contract  par- 
ticipation heretofore  steadfastly  maintained  by 
American  statesmen. 

It  is  too  bad  that  Senator  Eoot  in  quoting  from 
Mr.  Blaine's  instruction  to  Mr.  Lowell,  June  24, 
1881,  did  not  include  that  the  Treaty  of  1846  did 
not  require 

reinforcements  or  accession  or  assent  from  any  power. 

and  that  any  attempt  to  supersede  by  an  agree- 
ment of  European  powers  would 

partake  of  the  nature  of  an  alliance  against  the  United! 
States  and  would  be  regarded  by  this  Government  as 
an  indication  of  unfriendly  feeling. 

These  ideas  were  not  to  be  considered  as  a  new 
policy  since  they  were  "nothing  more  than  the 
pronounced  adherence  of  the  United  States  to 
principles  long  since  enunciated  by  the  highest  au- 
thority of  the  Government,  and,  now,  in  the  judg- 
ment of  the  President,  firmly  interwoven  as  an 


The  Speech  of  Senator  Elihu  Eoot     81 

integral  and  important  part  of  onr  national 
policy. ' ' 

And  if  we  now  admit  Great  Britain  to  exactly 
the  same  participation  in  privileges  without  the 
obligations  originally  demanded  what  becomes  of 
such  policy  as  was  so  persistently  upheld? 

Why  did  not  Senator  Eoot  in  fairness  quote 
from  the  communication  from  Mr.  Blaine  to  Mr. 
Lowell,  November  19,  1881,  in  which  Mr.  Blaine 
objected  to  the  perpetuity  of  the  Treaty  on  the 
ground  that  the  Clayton-Bulwer  Treaty 

gave  the  same  right  through  the  Canal  to  a  warship  bent 
upon  an  errand  of  destruction  to  the  United  States 
coasts,  as  to  a  vessel  of  the  American  Navy  sailing  for 
their  defense,  and  that  the  United  States  demanded  for 
its  own  defense  the  right  to  use  only  the  same  prevision 
as  Great  Britain  so  emphatically  employed  in  respect  of 
the  Suez  route,  by  the  possession  of  strategic  and  forti- 
fied post  and  otherwise,  for  the  defense  of  the  British 
Empire. 

No  one  doubts  but  that  the  United  States  would 
have  made  a  treaty  exchanging  an  agreement  for 
equal  treatment  through  the  Canal  for  absolute 
control  of  the  Canal  as  a  war  power  about  that 
time. 

But  Lord  Granville  was  not  ready  to  acquiesce 
in  any  concession. 

President  Arthur,  December,  1881,  in  strong 
language  stated  the  position  of  the  United  States 
as  follows: 


82     Canal  Tolls  and  American  Shipping 

Meanwhile  this  Government  learned  that  Colombia 
had  proposed  to  the  European  powers  to  join  in  a  guar- 
antee of  the  neutrality  of  the  proposed  Panama  Canal — 
a  guarantee  which  would  be  in  direct  contravention  of 
our  obligations  as  the  sole  guarantor  of  the  integrity  of 
Colombian  territory  and  of  the  neutrality  of  the  Canal 
itself.  My  lamented  predecessor  felt  it  his  duty  to 
place  before  the  European  powers  the  reasons  which 
make  the  prior  guarantee  of  the  United  States  indis- 
pensable, and  for  which  the  interjection  of  any  foreign 
guarantee  might  be  regarded  as  a  superfluous  and  un- 
friendly act. 

Senator  Root  quotes  statements  made  by  Mr. 
Blaine  in  1881  and  Mr.  Cass  in  1857,  thirty-three 
and  fifty-six  years  ago  and  says  that  it  was  such 
self-denying  and  solemn  assurance  that  the 
United  States  sought  a  notification  of  the  Clay- 
ton-Bulwer  Convention  and  entered  into  the 
Hay-Pauncefote  Treaty  with  the  clause  continu- 
ing the  principle  of  Clause  VIII  which  embodied 
the  declarations  of  equality  and  the  clause  estab- 
lishing the  rule  of  equality  taken  from  the  Suez 
Canal  Convention. 

Even  Senator  Root  must  confess  that  Article 
VIII  of  the  Clayton-Bulwer  Convention  covers 
neutrality  as  well  as  equal  treatment  and  the  care- 
ful pruning  of  the  Suez  Canal  rules  of  every  refer- 
ence to  equal  treatment  certainly  shows  how  far 
afield  Senator  Root  has  had  to  go  to  found  his 
case. 

His  case  rests  largely  upon  the  fact  that  under 


The  Speech  of  Senator  Elihu  Root     83 

the  conditions  existing  in  1850  and  for  a  num- 
ber of  years  after  the  necessary  capital  had  per- 
force to  come  from  Europe  and  hence  we  were 
making  as  sure  that  we  should  preserve  all  rights 
possible. 

What  was  thought  adequate  up  to  the  eighties 
was  totally  inadequate  in  1900.  I  do  not  charge 
misquotation  at  all  but  certainly  we  see  numerous 
examples  of  intentionally  misleading  quotation 
similar  to  picking  one  rule  out  of  an  article  and 
giving  it  all  the  force  it  would  have  if  it  were  un- 
limited and  unqualified. 

No  one  can  follow  Senator  Eoot  in  his  claim 
that  President  KoosevehVs  statement  that  we 
were  carrying  on  a  great  work  in  the  interest  of 
mankind  gives  rise  to  an  argument  that  we  could 
not  profit  as  a  people  generally  as  well  as  through 
specific  collection  of  tolls.  We  do  not  debate  the 
passage  of  the  Canal  but  hold  it  free  to  the  use 
of  all  nations  upon  equal  terms,  except  such  as 
will  extend  to  us  reciprocal  advantages  for  spe- 
cial privileges  as  will  be  done  when  the  people 
understand  the  simple  problems  involved. 

Why  did  not  Senator  Koot  in  his  contentions 
respecting  coasting  trade  citing  long  ago  inten- 
tions of  the  United  States  quote  the  clearly  ex- 
pressed attitude  of  this  country  as  enunciated  in 
the  message  of  President  Hayes  when  Mr.  Evarts 
was  Secretary  of  State: 

The  policy  of  this  country  is  a  Canal  under  American 


84     Canal  Tolls  and  American  Shipping 

control.  The  United  States  cannot  consent  to  the  sur- 
render of  this  control  to  any  European  power  or  to  any 
combination  of  European  powers.  The  Canal  would  be 
the  great  ocean  thoroughfare  between  our  Atlantic  and' 
Pacific  coasts,  and  virtually  a  part  of  the  coast  line  of 
the  United  States. 

I  have  looked  in  vain  for  any  renunciation  of 
this  stand.  To  argue  that  Great  Britain  through 
our  agreeing  to  neutralize  a  canal,  still  has  an 
overlordship  of  territory  under  our  sovereignty, 
putting  our  territory  under  the  servitude  of  a 
foreign  power  is  to  destroy  our  sovereign  rights 
on  the  Isthmus.  Senator  Eoot  flouts  this  sov- 
ereignty in  his  Senate  speech  of  January  21,  1913, 
saying  of  the  Canal  Zone: 

It  is  not  our  territory  except  in  trust. 

The  Hay-Bunau-Varilla  Treaty  does  not  bear 
out  this  statement.  Article  III  of  that  treaty  be- 
tween Panama  and  the  United  States  says: 

The  Republic  of  Panama  grants  to  the  United  States 
all  the  rights,  powers  and  authority  within  the  zone 
mentioned,  which  the  United  States  would  possess  and 
exercise  if  it  were  the  sovereign  of  the  territory  within 
which  said  lands  and  water  are  located,  to  the  entire 
exclusion  of  the  exercise  by  the  Republic  of  Panama  of 
any  such  sovereign  rights,  power  or  authority. 

And  under  Article  XIV  covering  the  payment 
of  the  fixed  sum  of  $10,000,000.00  and  an  annual 
payment  after  nine  years  of  $250,000.00  we  find : 

But  no  delay  or  difference  of  opinion  under  this  article 


The  Speech  of  Senator  Elihu  Eoot     85 

or  any  other  provisions  shall  affect  or  interrupt  the  full 
operation  and  effect  of  this  convention  in  all  other  re- 
spects. 

As  regards  the  grant  of  land  in  the  Zone,  Jus- 
tice Brewer  decided  that  such  a  grant  necessarily 
carried  the  fee  title  as  it  entirely  excluded  the 
rights,  present  or  reversionary,  of  any  other 
proprietor.  If  the  United  States  has  all  the 
rights,  power  and  authority  within  the  Zone, 
which  its  sovereignty  of  the  Zone  could  possess, 
and  is  to  exercise  these  powers  in  perpetuity  to 
the  entire  exclusion  of  the  enjoyment  by  the  Ee- 
public  of  Panama  of  any  such  rights,  power  or 
authority,  it  is  manifest  that  there  is  but  one 
sovereign  over  the  Zone  and  that  it  is  the  United 
States. 

Jefferson  in  doubt  as  to  the  Constitutional 
right  to  take  over  the  Louisiana  Purchase  was 
given  an  opinion  by  Chief  Justice  Marshall  as 
follows : 

The  Constitution  confers  absolutely  upon  the  Gov- 
ernment of  the  Union  the  powers  of  making  war  and 
of  making  treaties;  consequently,  that  Government  pos- 
sesses the  power  of  acquiring  territory,  either  by  con- 
quest or  by  treaty. 

And  if  we  wish  British  endorsement  we  find  in 
the  protest  of  Sir  Edward  Grey: 

Now  that  the  United  States  has  become  the  practical 
sovereign  of  the  Canal,  His  Majesty's  Government  do 


86     Canal  Tolls  and  American  Shipping 

not  question  its  title  to  exercise  belligerent  rights  for  its 
protection. 

And  let  us  not  forget  that  in  Article  I  of  the 
Hay-Bunau-Varilla  Treaty  the  "United  States> 
guarantees  and  will  maintain  the  independence  of 
the  Eepublic  of  Panama." 

The  change  of  territorial  sovereignty  referred 
to  in  the  Treaty  did  not  contemplate  ownership 
resting  in  one  or  the  other  parties  to  the  Treaty. 

Of  course  Senator  Boot's  arguments  as  to 
coasting  trade  are  far  fetched  and  as  we  have 
full  right  to  prefer  all  classes  of  our  vessels  they 
are  not  material.  As  far  back  as  the  Treaty  of 
1815  between  the  United  States  and  Great  Britain 
where  equality  of  treatment  of  vessels  was  very 
clearly  provided  for  we  find  coasting  trade  pre- 
ferred as  to  each  country. 

Following  the  argument  we  see  an  attempt  to 
justify  the  concession  in  the  Grey  protest  that  we 
may  protect  the  Canal,  by  attempting  to  square 
the  Suez  rules  with  the  Panama  rules,  of  course 
omitting  the  presentation  of  such  parts  of  the 
rules  as  make  their  claims  impossible.  Basing 
his  premise  upon  the  validity  of  the  British 
claims  Senator  Eoot  draws  certain  conclusions  as 
to  matters  in  dispute  that  are  in  no  sense  definite. 
Then  he  goes  into  the  question  of  the  arbitration 
of  the  Treaties.  An  effort  has  been  made  to 
separate  such  arbitration  disposal  from  the 
Senate.    It  is  to  be  hoped  this  may  not  be  done. 


The  Speech  of  Senator  Elihu  Eoot     87 

Think  what  we  should  have  had  were  the  first 
treaty  now  in  force  as  it  would  be  but  for  sub- 
mission to  the  Senate. 

The  writer  has  not  the  space  to  go  fully  into 
this  question.  The  interpretation  of  the  Treaty 
as  challenged  by  Great  Britain  does  affect  our 
independence,  our  honor  and  interest  of  third  par- 
ties. 

It  is  a  question  whether  land  belonging  to  us 
shall  be  subject  to  limited  sovereignty.  Whether 
having  acquired  sovereignty  over  it  such  sov- 
ereignty is  fraudulent.  If  another  nation  can 
enforce  its  decrees  over  the  Canal  it  can  enforce 
them  over  bodies  of  water  in  Central  and  South 
America  and  so  jeopardize  the  Monroe  Doctrine. 
It  is  not  an  arrogant  refusal  if  we  are  within  our 
rights  in  choosing  not  to  go  before  a  tribunal  con- 
trolled by  judges  representing  antagonistic  in- 
terests. 

The  remainder  of  the  speech  is  an  appeal  to 
arbitrate  because  if  we  do  not,  even  though  clearly 
within  our  rights,  we  may  be  charged  with  sharp 
practice — an  international  game  of  dare,  which 
has  worked  well  of  late  and  nearly  to  our  undoing 
but  which  will  end  with  our  people's  awakening. 


CHAPTER  VII 
THE  BRITISH  PROTEST 

This  protest  is  based  just  as  Senator  Root's 
was  upon  an  attempt  to  read  Article  VIII  of  the 
Clayton-Bulwer  Convention  into  the  Hay-Paunce- 
fote  Treaty. 

The  protests  and  Mr.  Knox's  reply  are  given 
in  the  Appendix. 

The  answer  of  Mr.  Knox  is  so  conclusive  and 
convincing  that  but  little  need  be  said. 

But  I  find  well  informed  men  writing  to  the 
papers  that  we  can  grant  subsidies  equal  to  the 
tolls.  They  have  not  read  the  protest.  For  if 
we  heed  it  we  find  very  clear  intimation  that  we 
must  not  do  so. 

There  is  some  very  devious  reasoning  indulged 
in  by  Sir  Edward  Grey.  He  says  Article  VIII 
does  not  mention  belligerent  action  at  all.  But 
the  Treaty  recognizes  that  it  covers  neutrality 
and  it  is  not  mentioned  except  as  a  principle 
established.  And  what  is  protection  for  except 
to  guard  against  possible  harmful  belligerent 
operations? 

The  earlier  chapters  cover  this  phase  of  the 
contention  and  the  reader  can  now  grasp  the 
subtlety  of  the  argument. 

88 


The  British  Protest  89 

We  find  quoted  in  the  protest  other  treaty  pacts 
calling  for  equal  treatment  in  language  clearly  ex- 
pressed and  because  we  managed  to  get  it  in 
Canada  after  twenty-one  years  of  protest  equal 
treatment  explicitly  provided  we  are  told  we  must 
now  accord  equal  treatment  because  an  instrument 
64  years  old  and  now  superseded  called  for  it  un- 
der conditions  not  now  holding. 

We  again  find  stated  that  we  surrendered  the 
right  to  build  by  the  Clayton-Bulwer  Treaty  and 
recovered  it  by  the  Hay-Pauncefote. 

Sir  Edward  says : 

The  case  cannot  be  put  more  clearly  than  it  was  put 
by  Mr.  Hay  himself,  who,  as  Secretary  of  State,  nego- 
tiated the  Hay-Pauncefote  Treaty,  in  the  full  account 
of  the  negotiations  which  he  sent  to  the  Senate  Commit- 
tee on  Foreign  Relations  (Senate  Document  746,  61st 
Congress,  3d  Session). 

He  quotes  Mr.  Hay  as  follows : 

These  rules  are  adopted  in  the  Treaty  with  Great 
Britain  as  a  consideration  for  getting  rid  of  the  Clayton- 
Bulwer  Treaty. 

Since  he  undoubtedly  had  the  document  before 
him  there  was  no  excuse,  except  that  of  grasping 
at  straws,  for  failure  to  put  this  quotation  as 
given;  there  is  no  period  after  treaty.  The  ac- 
tual statement  is: 

These  rules  are  adopted  in  the  Treaty  with  Great 
Britain  as  a  consideration  for  getting  rid  of  the  Clayton- 


90     Canal  Tolls  and  American  Shipping 

Bulwer  Treaty,  and  the  only  way  in  which  other  nations 
are  bound  by  them  is  that  they  must  comply  with  them 
if  they  would  use  the  Canal. 

The  finishing  of  this  sentence  disposes  of  Sir  Ed- 
ward Grey's  contention. 

No  one  could  assume  the  protest  anything  other 
than  a  policy  of  desperation  with  which  to  capi- 
talize the  great  tory  sentiment  which  seems  now 
to  be  so  prevalent  in  our  land. 

Sir  Edward  Grey  threatens  another  protest  in 
case  we  treat  the  vessels  of  all  nations  on  terms 
of  equality  by  barring  railroad  owned  vessels 
from  the  Canal.  He  says  in  effect,  "  Apply  your 
laws  to  your  own  vessels  hut  do  not  treat  the 
vessels  of  other  nations  in  the  same  way." 

Sir  Edward  Grey  says  he  cannot  see  how  the 
principle  "  which  provides  for  equal  treatment  of 
British  and  United  States  ships  has  been  main- 
tained.'J  No  one  else  can,  because  it  is  not  main- 
tained. In  so  far  as  Article  VIII  secured  neu- 
trality it  has  been  incorporated  in  principle.  He 
cannot  see  what  was  obtained  by  England.  If  he 
will  read  Lord  Lansdowne's  communications  he 
will  see  that  she  was  relieved  from  the  whole  re- 
sponsibility of  "upholding  the  rules  and  main- 
taining the  neutrality  of  the  Canal' ' — the  saving 
surely  of  a  tidy  sum. 

Here  is  a  definite  acceptance  by  Lord  Lans- 
downe  of  the  fact  that  neutrality  is  secured 
through  maintaining  the  rules  of  Article  III. 


The  British  Protest  91 

We  have  covered  the  matter  of  the  tolls  be- 
ing just  and  equitable.  Suez  pays  25  per  cent, 
and  over  while  foreign  nations  regard  with  com- 
placency tolls  that  pay  us  less  than  two  per  cent. 

There  is  a  very  clear  intimate  that  while  gra- 
ciously consenting  to  our  granting  subsidies  in 
some  branches  there  may  be  cases  where  Great 
Britain  will  protest  if  used  in  connection  with  the 
Canal. 

The  boom  in  American  shipbuilding  and  con- 
sequent ship  owning  was  a  dire  warning  to  the 
great  maritime  countries  of  Europe.  They  be- 
stirred themselves  and  the  boom  collapsed. 

Of  course  laying  down  the  law  for  us  and  in- 
terpreting Article  III  to  their  liking  it  is  easy 
to  figure  out  that  all  violations  of  such  interpreta- 
tion are  in  conflict  with  treaty  provisions  and  in 
the  end  we  are  permitted  to  control  the  Canal ;  an 
empty  honor  as  Sir  Edward  Grey  construes  it  and 
one  which  we  had  in  the  1850  agreement  if  we  had 
furnished  the  money. 


CHAPTER  VIII 
REGULATION  OF  COMMERCE 

We  must  assume  that  Congress  wishes  to  regu- 
late commerce  in  the  interest  of  the  United  States. 

The  Baltimore  Convention  platform  represent- 
ing the  views  of  the  party  of  the  Administration 
advocates  the  encouragement  of  our  merchant 
marine  through  constitutional  regulation  of  com- 
merce. Hence  we  must  seek  the  meaning  of  con- 
stitutional regulation. 

When  the  thirteen  colonies  of  Great  Britain 
achieved  their  independence,  they  were  impover- 
ished, with  a  pitiable  small  merchant  marine,  and 
conditions  were  such  that  continuing  as  they  were 
their  poverty  would  increase  and  their  marine 
would  vanish.  These  thirteen  States  had  as 
many  means  of  regulating  commerce,  leading  to 
endless  confusion  and  loss.  So  it  was  realized 
that  a  central  power  to  regulate  commerce  was 
necessary,  and  such  necessity  was  the  compelling 
cause  of  the  adoption  of  the  Constitution. 

We  may  safely  believe  that  the  men  who  took 
part  in  the  framing  of  the  Constitution  knew 
what  was  meant  by  its  provisions.  They  were 
leaders  in  public  thought,  so  we  find  many  of 

92 


Regulation  of  Commerce  93 

them  members  of  the  First  Congress  that  carried 
the  ideals  and  intentions  of  the  Constitution  into 
effect  by  appropriate  legislation. 

A  close  study  of  the  debates  leading  up  to  the 
drafting  of  the  Constitution  and  the  speeches  and 
reports  of  our  statesmen  engaged  in  early  legisla- 
tion has  shown  me  that  the  power  to  regulate  com- 
merce contemplated  discrimination  when  neces- 
sary or  desirable.  To  show  how  entirely  the  great 
men  of  the  day  agreed  upon  great  fundamental 
principles  essential  to  the  general  welfare  I  quote 
from  "Debates  of  Congress,"  by  Colonel  Thomas 
H.  Benton: 

In  the  House  of  Representatives  in  1794  occurred  one 
of  the  most  interesting  and  elaborate  debates  which  our 
Congress  has  furnished.  It  grew  out  of  the  clause  of 
the  Constitution  conferring  power  to  regulate  commerce 
with  foreign  nations  and  gives  the  interpretation  of  its 
authors,  which  is  wholly  different  in  its  nature  and  also 
distinct  from  the  power  to  lay  and  collect  import  duties. 
The  latter  was  to  raise  revenue,  the  former  to  make  such 
discriminations  in  trade  and  transportation  as  to  pro- 
tect our  merchants  and  ship  owners  from  the  adverse 
regulations  and  devices  of  our  rivals. 

Let  us  examine  the  laws  passed  at  the  First 
Congress  and  see  how  commerce  with  foreign  na- 
tions was  regulated,  for  surely  their  authors  knew 
the  meaning  of  constitutional  regulation.  So 
clear  was  the  course  as  charted  by  the  Constitu- 
tion that  Jefferson,  Madison  and  Hamilton  were 
in  perfect  accord. 


94     Canal  Tolls  and  American  Shipping 

First  a  discrimination  was  secured  by  allowing 
10  per  cent,  less  duty  on  goods  imported  in  Ameri- 
can vessels.  Differential  tonnage  taxes  were  pro- 
vided, 6  cents  per  ton  on  American-built  and 
owned  vessels,  American  coasting  vessels  paying 
but  once  a  year;  30  cents  per  ton  on  American- 
built  and  foreign  owned  vessels  and  50  cents  per 
ton  on  vessels  foreign  owned  and  built.  The 
great  Asiatic  trade  was  secured  by  grading  duties 
on  tea  far  lower  in  American  vessels  than  if 
brought  in  foreign  vessels.  American  register 
was  confined  to  American-built  vessels.  The 
same  care  then  for  our  people  on  sea  and  shore 
inspired  laws  making  the  berthing  and  messing 
of  our  seamen  the  best  in  the  world.  What  an  ex- 
ample in  constructive  statesmanship!  Shipbuild- 
ing, ship  operations  and  seamen  all  fostered  by 
constitutional  regulation  enacted  by  Constitution 
makers. 

Before  these  laws  were  passed  English  ship- 
ping was  doing  over  70  per  cent,  of  our  trade, 
but  by  1812  this  proportion  was  reversed.  Until 
1812  the  average  foreign  balance  due  to  profits  in 
shipping,  insurance,  banking  and  passenger  traffic 
was  not  less  than  $50,000,000.  The  drain  of  gold 
due  to  dependence  upon  foreign  shipping,  now 
about  $350,000,000  annually,  must  be  taken  into 
account  and  added  as  an  import;  for  balances  of 
trade,  not  taking  into  account  transportation 
charges,  are  as  misleading  as  those  of  any  shop 


Kegulation  of  Commerce  95 

which  omits  its  delivery  charges  from  its  state- 
ments. 

Then  the  War  of  1812,  purposely  provided  to 
check  our  maritime  growth,  was  fought.  In  1815, 
as  the  price  of  peace,  we  abandoned  discrimina- 
tion in  the  direct  trade,  or  trade  to  or  from  a 
country  entirely  in  the  ships  of  the  two  countries. 
But  the  crowning  act  of  unwisdom  and  national 
betrayal  was  when  we,  in  1828,  threw  open  our 
indirect  trade  to  favored  nations. 

As  a  result  of  abandoning  preference  for  our 
own  commerce  there  has  been  a  constant  decline 
of  the  proportion  of  our  trade  carried  in  our  ships 
from  92%  per  cent,  in  1826  to  about  8  per  cent, 
at  the  present  time. 

Of  course  the  losses  due  to  our  Civil  War,  the 
change  from  wood  to  iron,  and  from  sails  to  steam, 
discrimination  against  our  shipping  by  foreign  in- 
surance and  rating  companies,  the  bonded  ware- 
houses giving  credit  for  duties,  contracts  for  ad- 
vance charters,  foreign  shipping  conferences, 
trusts,  pools  and  combines  and  payments  now  ag- 
gregating $50,000,000  annually  to  support  their 
shipping,  have  supplemented  this  betrayal  by  our 
national  legislators  of  a  duty  enjoined  by  the 
Constitution  and  their  oath  to  support  its  pro- 
visions. 

Preference  proven  in  effectiveness  by  the  logic 
of  successful  application  is  what  is  feared  by  the 
foreign  nations.     They  do  not  fear  subsidies,  for 


96     Canal  Tolls  and  American  Shipping 

they  know  that  competition  on  the  ocean  does  not 
secure  business,  but,  knowing  the  unpopularity  of 
the  word,  they  call  helpful  constitutional  regula- 
tion " subsidy' '  to  enlist  such  prejudice  against  it. 
Proper  regulation  gives  preference  at  market 
rates;  subsidies  must  cut  rates  without  cer- 
tainty of  preference.  Again,  they  prate  of 
monopoly  and  wish  us  to  ignore  the  menace  of 
vast  portent  which  has  grown  up  on  the  seas.  We 
are  faced  upon  the  ocean  by  a  monopoly  of  ship- 
building, of  commerce  and  of  the  arts  and  acces- 
sories of  navigation,  together  with  inordinate 
naval  power.  In  many  cases  the  disposition  and 
price  received  by  the  producer  are  fixed  by  the 
carrier,  so  essentially  necessary  are  trade  connec- 
tions and  distributing  agencies  to  the  great  mari- 
time fleets  of  the  present  day,  and,  of  course,  such 
powers  are  used  in  every  way  possible  to  advance 
the  material  interests  of  the  country  of  their 
flag. 

The  coasting  trade  is  in  no  sense  a  monopoly. 
Any  American  who  has  a  vessel,  large  or  small, 
can  engage  in  it.  The  ridiculous  claim  that  re- 
mission of  tolls  is  in  the  nature  of  a  subsidy  falls 
in  the  face  of  the  fact  that  rates  quoted  for  future 
delivery  via  the  Canal  are  at  certain  figures,  plus 
the  Canal  tolls,  if  exacted. 

If  constitutional  regulation  of  commerce  is  to  be 
adopted,  we  must  adopt  not  only  the  policies  of 
Jefferson  for  such  regulation,  but  so  great  is  our 
prostration  that  supreme  effort  is  required  to  re- 


Regulation  of  Commerce  97 

habilitate  our  marine,  and  hence  constructive 
statesmanship  should  adopt  policies  broadened 
along  similar  lines  to  utilize  possibilities  for 
preference  not  available  in  Jefferson's  time. 

Preference  in  canal  use  squares  with  the  prefer- 
ence of  our  early  laws  and  is  no  more  a  subsidy 
than  it  was  then.  Thus  discriminating  duties 
offering  lower  duties  or  no  duties  on  goods  brought 
in  American  vessels,  differential  tonnage  taxes 
offering  lower  taxes  on  American  vessels  and  dis- 
criminating tolls,  offering  lower  tolls  or  no  tolls  on 
American  vessels,  are  no  more  a  subsidy  than  is 
putting  an  article  on  the  free  list  a  subsidy  to  the 
foreign  maker,  whose  product  drives  a  domestic 
product  out  of  the  home  market,  which  our  maker 
is  taxed  to  maintain. 

Article  II  of  the  Hay-Pauncefote  Treaty  as  sev- 
eral times  stated  gives  us  full  power  to  provide 
for  the  regulation  and  management  of  the  Canal. 
Since  American  opponents  are  quick  to  grasp  at 
strained  interpretations  we  must  throw;  light  upon 
the  meaning  of  regulation. 

Since  the  Clayton-Bulwer  Canal  had  to  be  regu- 
lated as  well,  we  find  in  Article  V  of  that  instru- 
ment as  a  basis  for  the  withdrawal  of  protection : 

If  the  persons  or  company  undertaking  or  managing 
the  Canal  had  established  regulations  concerning  traffic 
by  making  unfair  discriminations  or  by  imposing  op- 
pressive exactions  or  unreasonable  tolls. 

Certainly    regulation    as    contemplated    there 


98     Canal  Tolls  and  American  Shipping 

covered  the'  imposition  of  tolls  and  the  laying 
down  of  conditions  of  traffic. 

And  we  see  this  is  the  same  idea  of  regulation  as 
was  had  hy  the  makers  of  our  Constitution  and 
our  earlier  laws. 

The  interpretation  of  regulation  speaks  just  as 
clearly  to-day  as  when  even  Jefferson,  Madison 
and  Hamilton  were  in  accord  as  to  its  meaning. 

A  later  exposition  is  that  of  the  late  Justice 
Field  of  the  Supreme  Court  of  the  United  States  : 

To  regulate  commerce  is  to  prescribe  the  rules  by  which 
it  shall  be  governed — that  is,  the  conditions  under  which 
it  shall  be  conducted,  to  determine  how  far  it  shall  be 
free  and  untrammeled,  how  far  it  shall  be  burdened  by 
duties  and  imposts  and  how  far  it  shall  be  prohibited. 

We  have  control  of  the  Canal,  we  prescribe 
rules  for  its  belligerent  use  and  then  are  left,  out- 
side the  obligations  of  extending  impartial  bellig- 
erent use  to  enjoy  the  rights  incident  to  construc- 
tion, with  full  power  to  use  the  Canal  to  our  ad- 
vantage just  as  every  other  nation  in  the  world 
would  do. 

While  under  our  favored  nation  treaties  we 
shall  in  general  accord  equal  tolls  to  the  vessels 
of  other  nations,  there  is  nothing  to  prevent  our 
making  reciprocal  concessions  to  other  nations. 
On  no  other  score  could  Senator  Boot  have  justi- 
fied his  negotiation  of  the  tripartite  treaty  be- 
tween Panama,  Columbia  and  the  United  States. 


APPENDICES 


APPENDICES 

THE  CLAYTON-BULWER  CONVENTION 

The  United  States  of  America  and  Her  Britannic  Majesty, 
being  desirous  of  consolidating  the  relations  of  amity  which 
so  happily  subsist  between  them,  by  setting  forth  and  fixing 
in  a  Convention  their  views  and  intentions  with  reference  to 
any  means  of  communication  by  ship  canal,  which  may  be  con- 
structed between  the  Atlantic  and  Pacific  Oceans  by  the  way 
of  the  River  San  Juan  de  Nicaragua  and  either  or  both  of  the 
Lakes  of  Nicaragua  or  Managua,  to  any  port  or  place  on  the 
Pacific  Ocean, — The  President  of  the  United  States  has  con- 
ferred full  powers  on  John  M.  Clayton,  Secretary  of  State  of 
the  United  States;  and  Her  Britannic  Majesty  on  the  Right 
Honorable  Sir  Henry  Lytton  Bulwer,  a  member  of  Her  Maj- 
esty's Most  Honorable  Privy  Council,  Knight  Commander  of 
the  Most  Honorable  Order  of  the  Bath,  and  Envoy  Extraor- 
dinary and  Minister  Plenipotentiary  of  Her  Britannic  Majesty 
to  the  United  States,  for  the  aforesaid  purpose;  and  the  said 
Plenipotentiaries  having  exchanged  their  full  powers,  which 
were  found  to  be  in  proper  form,  have  agreed  to  the  following 
articles : 

ARTICLE  I 

The  Governments  of  the  United  States  and  Great  Britain 
hereby  declare,  that  neither  the  one  nor  the  other  will  ever  ob- 
tain or  maintain  for  itself  any  exclusive  control  over  the  said 
Ship  Canal;  agreeing  that  neither  will  ever  erect  or  maintain 
any  fortifications  commanding  the  same,  or  in  the  vicinity 
thereof,  or  occupy,  or  fortify,  or  colonize,  or  assume  or  exer- 
cise any  dominion  over  Nicaragua,  Costa  Rica,  the  Mosquito 
Coast,  or  any  part  of  Central  America;  nor  will  either  make 
use  of  any  protection  which  either  affords  or  may  afford,  or 

101 


102      The  Clayton-Bulwer  Convention 

any  alliance  which  either  has  or  may  have,  to  or  with  any 
State  or  People  for  the  purpose  of  erecting  or  maintaining 
any  such  fortifications,  or  of  occupying,  fortifying,  or  coloniz- 
ing Nicaragua,  Costa  Rica,  the  Mosquito  Coast,  or  any  part 
of  Central  America,  or  of  assuming  or  exercising  dominion 
over  the  same ;  nor  will  the  United  States  or  Great  Britain  take 
advantage  of  any  intimacy,  or  use  any  alliance,  connection  or 
influence  that  either  may  possess  with  any  State  or  Govern- 
ment through  whose  territory  the  said  Canal  may  pass,  for  the 
purpose  of  acquiring  or  holding,  directly  or  indirectly,  for  the 
citizens  or  subjects  of  the  one,  any  rights  or  advantages  in  re- 
gard to  commerce  or  navigation  through  the  said  canal  which 
shall  not  be  offered  on  the  same  terms  to  the  citizens  or  sub- 
jects of  the  other. 

ARTICLE   II 

Vessels  of  the  United  States  or  Great  Britain,  traversing 
the  said  Canal  shall,  in  case  of  war  between  the  contracting 
parties,  be  exempted  from  blockade,  detention  or  capture,  by 
either  of  the  belligerents;  and  this  provision  shall  extend  to 
such  a  distance  from  the  two  ends  of  the  said  Canal  as  may 
hereafter  be  found  expedient  to  establish. 

ARTICLE  III 

In  order  to  secure  the  construction  of  the  said  Canal,  the 
contracting  parties  engage  that,  if  any  such  Canal  shall  be  un- 
dertaken upon  fair  and  equitable  terms  by  any  parties  having 
the  authority  of  the  local  Government  or  Governments  through 
whose  territory  the  same  may  pass,  then  the  persons  employed 
in  making  the  said  Canal  and  their  property  used,  or  to  be 
used,  for  that  object,  shall  be  protected,  from  the  commence- 
ment of  the  said  Canal  to  its  completion,  by  the  Governments 
of  the  United  States  and  Great  Britain,  from  unjust  detention, 
confiscation,  seizure  or  any  violence  whatsoever. 

ARTICLE  IV 

The  contracting  parties  will  use  whatever  influence  they  re- 


The  Clayton-Bulwer  Convention      103 

speetively  exercise,  with  any  State,  States  or  Governments  pos- 
sessing, or  claiming  to  possess,  any  jurisdiction  or  right  over 
the  territory  which  the  said  Canal  shall  traverse,  or  which  shall 
be  near  the  waters  applicable  thereto;  in  order  to  induce  such 
States,  or  Governments,  to  facilitate  the  construction  of  the 
said  Canal  by  every  means  in  their  power;  and  furthermore, 
the  United  States  and  Great  Britain  agree  to  use  their  good 
offices,  wherever  or  however  it  may  be  most  expedient,  in  order 
to  procure  the  establishment  of  two  free  Ports, — one  at  each 
end  of  the  said  Canal. 

article  v 
The  contracting  parties  further  engage  that,  when  the  said 
Canal  shall  have  been  completed  they  will  protect  it  from  inter- 
ruption, seizure  or  unjust  confiscation,  and  that  they  will  guar- 
antee the  neutrality  thereof,  so  that  the  said  Canal  may  for- 
ever be  open  and  free,  and  the  capital  invested  therein,  secure. 
Nevertheless,  the  Governments  of  the  United  States  and  Great 
Britain,  in  according  their  protection  to  the  construction  of 
the  said  Canal,  and  guaranteeing  its  neutrality  and  security 
when  completed,  always  understand  that,  this  protection  and 
guarantee  are  granted  conditionally,  and  may  be  withdrawn 
by  both  Governments,  or  either  Government,  if  both  Govern- 
ments or  either  Government,  should  deem  that  the  persons  or 
company,  undertaking  or  managing  the  same,  adopt  or  es- 
tablish such  regulations  concerning  the  traffic  thereupon,  as  are 
contrary  to  the  spirit  and  intention  of  this  Convention, — 
either  by  making  unfair  discriminations  in  favor  of  the  com- 
merce of  one  of  the  contracting  parties  over  the  commerce  of 
the  other,  or  by  imposing  oppressive  exactions  or  unreasonable 
tolls  upon  passengers,  vessels,  goods,  wares,  merchandise,  or 
other  articles.  Neither  party,  however,  shall  withdraw  the 
aforesaid  protection  and  guarantee  without  first  giving  six 
months  notice  to  the  other. 

iARTICLE  VI 

The  contracting  parties  in  this  Convention  engage  to  invite 


104      The  Clayton-Bulwer  Convention 

every  State  with  which  both  or  either  have  friendly  intercourse, 
to  enter  into  stipulations  with  them  similar  to  those  which 
they  have  entered  into  with  each  other ;  to  the  end  that  all  other 
States  may  share  in  the  honor  and  advantage  of  having  con- 
tributed to  a  work  of  such  general  interest  and  importance  as 
the  Canal  herein  contemplated.  And  the  contracting  parties 
likewise  agree  that,  each  shall  enter  into  Treaty  stipulations 
with  such  of  the  Central  American  States,  as  they  may  deem 
advisable,  for  the  purpose  of  more  effectually  carrying  out 
the  great  design  of  this  Convention,  namely, — that  of  con- 
structing and  maintaining  the  said  Canal  as  a  ship-communi- 
cation between  the  two  Oceans,  for  the  benefit  of  mankind,  on 
equal  terms  to  all,  and  of  protecting  the  same;  and  they,  also, 
agree  that,  the  good  offices  of  either  shall  be  employed,  when 
requested  by  the  other,  in  aiding  and  assisting  the  negotiations 
of  such  treaty  stipulations;  and,  should  any  differences  arise  as 
to  right  or  property  over  the  territory  through  which  the  said 
Canal  shall  pass, — (between  the  States  or  Governments  of  Cen- 
tral America, — and  such  differences  should,  in  any  way,  im- 
pede or  obstruct  the  execution  of  the  said  Canal,  the  Govern- 
ments of  the  United  States  and  Great  Britain  will  use  their 
good  offices  to  settle  such  differences  in  the  manner  best  suited 
to  promote  the  interests  of  the  said  Canal,  and  to  strengthen 
the  bonds  of  friendship  and  alliance  which  exist  between  the 
contracting  parties. 

ARTICLE  VII 

lit  being  desirable  that  no  time  should  be  unnecessarily  lost 
in  commencing  and  constructing  the  said  Canal,  the  Govern- 
ments of  the  United  States  and  Great  Britain  determine  to 
give  their  support  and  encouragement  to  such  persons,  or  com- 
pany, as  may  first  offer  to  commence  the  same,  with  the  neces- 
sary capital,  the  consent  of  the  local  authorities,  and  on  such 
principles  as  accord  with  the  spirit  and  intention  of  this  Con- 
vention; and  if  any  persons,  or  company,  should  already  have, 
with  any  State  through  which  the  proposed  Ship-Canal  may 
pass,  a  contract  for  the  construction  of  such  a  canal  as  that 


The  Clayton-Bulwer  Convention      105 

specified  in  this  Convention, — to  the  stipulations  of  which  con- 
tract neither  of  the  contracting  parties  in  this  convention  have 
any  just  cause  to  object, — and  the  said  persons,  or  company, 
shall  moreover,  have  made  preparations  and  expended  time, 
money,  and  trouble  on  the  faith  of  such  contract,  it  is  hereby 
agreed  that  such  persons,  or  company,  shall  have  a  priority  of 
claim  over  every  other  person,  persons,  or  company  to  the  pro- 
tection of  the  Governments  of  the  United  States  and  Great 
Britain,  and  be  allowed  a  year,  from  the  date  of  the  exchange 
of  the  ratifications  of  this  Convention  for  concluding  their  ar- 
rangements, and  presenting  evidence  of  sufficient  capital  sub- 
scribed to  accomplish  the  contemplated  undertaking;  it  being 
understood,  that  if,  at  the  expiration  of  the  aforesaid  period, 
such  persons,  or  company  be  not  able  to  commence  and  carry 
out  the  proposed  enterprise,  then  the  Governments  of  the 
United  States  and  Great  Britain  shall  be  free  to  afford  their 
protection  to  any  other  persons,  or  company,  that  shall  be 
prepared  to  commence  and  proceed  with  the  construction  of 
the  Canal  in  question. 

ARTICLE  VIII 

The  Governments  of  the  United  States  and  Great  Britain 
having  not  only  desired  in  entering  into  this  Convention,  to 
accomplish  a  particular  object,  but,  also,  to  establish  a  gen- 
eral principle,  they  hereby  agree  to  extend  their  protection,  by 
Treaty  stipulations,  to  any  other  practical  communications, 
whether  by  Canal  or  rail-way,  across  the  Isthmus  which  con- 
nects North  and  South  America;  and,  especially  to  the  inter- 
oceanic  communications, — should  the  same  prove  to  be  prac- 
ticable, whether  by  Canal  or  rail-way, — which  are  now  pro- 
posed to  be  established  by  the  way  of  Tehuantepec,  or  Panama. 
In  granting,  however,  their  joint  protection  to  any  such  Canals 
or  rail-ways,  as  are  by  this  Article  specified,  it  is  always  un- 
derstood by  the  United  States  and  Great  Britain,  that  the  par- 
ties constructing  or  owning  the  same,  shall  impose  no  other  1 
charges  or  conditions  of  traffic  thereupon,  than  the  aforesaid 


106         The  Hay-Pauncefote  Treaty 

Governments  shall  approve  of,  as  just  and  equitable;  and, 
that  the  same  Canals  or  rail-ways,'  being  open  to  the  citizens 
and  subjects  of  the  United  States  and  Great  Britain  on  equal 
terms,  shall,  also,  be  open  on  like  terms  to  the  citizens  and 
subjects  of  every  other  State  which  is  willing  to  grant  thereto, 
such  protection  as  the  United  States  and  Great  Britain  engage 
to  afford. 

ARTICLE   IX 

The  ratifications  of  this  Convention  shall  be  exchanged  at 
Washington,  within  six  months  from  this  day,  or  sooner,  if 
possible. 

In  faith  whereof,  we,  the  respective  Plenipotentiaries,  have 
signed  this  Convention,  and  have  hereunto  affixed  our  Seals. 

Done,  at  Washington,  the  nineteenth  day  of  April,  Anno 
Domini  one  thousand  eight  hundred  and  fifty. 

John  M.  Clayton.  [seal.] 

Henry  Lytton  Bulwer.     [seal.] 


THE  HAY-PAUNCEFOTE  TREATY 

Whereas,  a  Convention  between  the  United  States  of  Amer- 
ica and  the  United  Kingdom  of  Great  Britain  and  Ireland,  to 
facilitate  the  construction  of  a  ship  canal  to  connect  the 
Atlantic  and  Pacific  Oceans,  by  whatever  route  may  be  consid- 
ered expedient,  and  to  that  end  to  remove  any  objection  which 
may  arise  out  of  the  Convention  of  the  19th  April,  1850,  com- 
monly called  the  Clayton-Bulwer  treaty,  to  the  construction  of 
such  canal  under  the  auspices  of  the  Government  of  the  United 
States,  without  impairing  the  "g^nei'al  principle"  of  neutral- 
ization established  in  Article  VIII  of  that  Convention,  was 
concluded  and  signed  by  their  respective  plenipotentiaries  at 
the  city  of  Washington  on  the  18th  day  of  November,  1901, 
the  original  of  which  Convention  is  word  for  word  as  follows : 

The  United  States  of  America  and  His  Majesty  Edward  the 
Seventh,  of  the  United  Kingdom  of  Great  Britain  and  Ireland, 


The  Hay-Pauncefote  Treaty         107 

and  of  the  British  Dominions  beyond  the  Seas,  King,  and  Em- 
peror of  India,  being-  desirous  to  facilitate  the  construction 
of  a  ship  canal  to  connect  the  Atlantic  and  Pacific  Oceans, 
by  whatever  route  may  be  considered  expedient,  and  to  that 
end  to  remove  any  objection  which  may  arise  out  of  the  Con- 
vention of  the  19th  April,  1850,  commonly  called  the  Clayton- 
Bulwer  Treaty,  to  the  construction  of  such  canal  under  the 
auspices  of.  the  Government  of  the  United  States,  without  im- 
pairing the  "general  principle"  of  neutralization  established  in 
Article  VIII  of  that  Convention,  have  for  that  purpose  ap- 
pointed as  their  Plenipotentiaries: 

The  President  of  the  United  States,  John  Hay,  Secretary  of 
State  of  the  United  States  of  America; 

And  His  Majesty  Edward  the  Seventh,  of  the  United  King- 
dom of  Great  Britain  and  Ireland,  and  of  the  British  Domin- 
ions beyond  the  Seas,  King,  and  Emperor  of  India,  the  Right 
Honourable  Lord  Pauncefote,  G.  C.  B.,  G.  C.  M.  G.,  His  Maj- 
esty's Ambassador  Extraordinary  and  Plenipotentiary  to  the 
United  States; 

Who,  having  communicated  to  each  other  their  full  powers 
which  were  found  to  be  in  due  and  proper  form,  have  agreed 
upon  the  following  Articles: — 

ARTICLE   I 

The  High  Contracting  Parties  agree  that  the  present  Treaty 
shall  supersede  the  afore-mentioned  Convention  of  the  19th 
April,  1850. 

ARTICLE   II 

It  is  agreed  that  the  canal  may  be  constructed  under  the 
auspices  of  the  Government  of  the  United  States,  either  directly 
at  its  own  cost,  or  by  gift  or  loan  of  money  to  individuals  or 
Corporations,  or  through  subscription  to  or  purchase  of  stock 
or  shares,  and  that,  subject  to  the  provisions  of  the  present 
Treaty,  the  said  Government  shall  have  and  enjoy  all  the  rights 
incident  to  such  construction,  as  well  as  the  exclusive  right  of 
providing  for  the  regulation  and  management  of  the  canal. 


108         The  Hay-Pauncefote  Treaty 


ARTICLE   III 

The  United  States  adopts,  as  the  basis  of  the  neutralization 
of  such  ship  canal,  the  following  Rules,  substantially  as  em- 
bodied in  the  Convention  of  Constantinople,  signed  the  28th 
October,  1888,  for  the  free  navigation  of  the  Suez  Canal,  that 
is  to  say: 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  com- 
merce and  of  war  of  all  nations  observing  these  Rules,  on  terms 
of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  such  nation,  or  its  citizens  or  subjects,  in  respect 
of  the  conditions  or  charges  of  traffic,  or  otherwise.  Such  con- 
ditions and  charges  of  traffic  shall  be  just  and  equitable. 

2.  The  canal  shall  never  be  blockaded,  nor  shall  any  right 
of  war  be  exercised  nor  any  act  of  hostility  be  committed  within 
it.  The  United  States,  however,  shall  be  at  liberty  to  main- 
tain such  military  police  along  the  canal  as  may  be  necessary 
to  protect  it  against  lawlessness  and  disorder. 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual  nor  take 
any  stores  in  the  canal  except  so  far  as  may  be  strictly  neces- 
sary; and  the  transit  of  such  vessels  through  the  canal  shall 
be  effected  with  the  least  possible  delay  in  accordance  with  the 
Regulations  in  force,  and  with  only  such  intermission  as  may 
result  from  the  necessities  of  the  service. 

Prizes  shall  be  in  all  respects  subject  to  the  same  Rules  as 
vessels  of  war  of  the  belligerents. 

4.  No  belligerent  shall  embark  or  disembark  troops,  muni- 
tions of  war,  or  warlike  materials  in  the  canal,  except  in  case 
of  accidental  hindrance  of  the  transit,  and  in  such  case  the 
transit  shall  be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  Article  shall  apply  to  waters  adja- 
cent to  the  canal,  within  3  marine  miles  of  either  end.  Ves- 
sels of  war  of  a  belligerent  shall  not  remain  in  such  waters 
longer  than  twenty-four  hours  at  any  one  time,  except  in  case 
of  distress,  and  in  such  case,  shall  depart  as  soon  as  possible; 
but  a  vessel  of  war  of  one  belligerent  shall  not  depart  within 


The  Hay-Bunau-Varilla  Treaty      109 

twenty-four  hours  from  the  departure  of  a  vessel  of  war  of 
the  other  belligerent. 

6.  The  plant,  establishments,  buildings,  and  all  works  neces- 
sary to  the  construction,  maintenance,  and  operation  of  the 
canal  shall  be  deemed  to  be  part  thereof,  for  the  purposes  of 
this  Treaty,  and  in  time  of  war,  as  in  time  of  peace,  shall  en- 
joy complete  immunity  from  attack  or  injury  by  belligerents, 
and  from  acts  calculated  to  impair  their  usefulness  as  part  of 
the  canal. 

ARTICLE   IV 

It  is  agreed  that  no  change  of  territorial  sovereignty  or  of 
the  international  relations  of  the  country  or  countries  traversed 
by  the  before-mentioned  canal  shall  affect  the  general  principle 
of  neutralization  or  the  obligation  of  the  High  Contracting 
Parties  under  the  present  Treaty. 

article  v 

The  present  Treaty  shall  be  ratified  by  the  President  of  the 
United  States,  by  and  with  the  advice  and  consent  of  the 
Senate  thereof,  and  by  His  Britannic  Majesty;  and  the  ratifi- 
cations shall  be  exchanged  at  Washington  or  at  London  at 
the  earliest  possible  time  within  six  months  from  the  date 
hereof. 

In  faith  whereof  the  respective  Plenipotentiaries  have  signed 
this  Treaty  and  thereunto  affixed  their  seals. 

Done  in  duplicate  at  Washington,  the  18th  day  of  Novem- 
ber, in  the  year  of  Our  Lord  one  thousand  nine  hundred  and 
one. 

John  Hay.      [seal.] 
Pauncefote.     [seal.] 


THE  HAY-BUNAU-VARILLA  TREATY 

The  United  States  of  America  and  the  Republic  of  Panama 
being  desirous  to  insure  the  construction  of  a  ship  canal  across 


110      The  Hay-Bunau-Varilla  Treaty 

the  Isthmus  of  Panama  to  connect  the  Atlantic  and  Pacific 
Oceans,  and  the  Congress  of  the  United  States  of  America  hav- 
ing passed  an  act  approved  June  28,  1902,  in  furtherance  of 
that  object,  by  which  the  President  of  the  United  States  is 
authorized  to  acquire  within  a  reasonable  time  the  control  of 
the  necessary  territory  of  the  Republic  of  Colombia,  and  the 
sovereignty  of  such  territory  being  actually  vested  in  the 
Republic  of  Panama,  the  high  contracting  parties  have  re- 
solved for  that  purpose  to  conclude  a  convention  and  have 
accordingly  appointed  as  their  plenipotentiaries, — 

The  President  of  the  United  States  of  America,  John  Hay, 
Secretary  of  State,  and 

The  Government  of  the  Republic  of  Panama,  Philippe 
Bunau-Varilla,  Envoy  Extraordinary  and  Minister  Plenipo- 
tentiary of  the  Republic  of  Panama,  thereunto  specially 
empowered  by  said  government,  who  after  communicating  with 
each  other  their  respective  full  powers,  found  to  be  in  good  and 
due  form,  have  agreed  upon  and  concluded  the  following  ar- 
ticles : 

ARTICLE   I 

'The  United  States  guarantees  and  will  maintain  the  inde- 
pendence of  the  Republic  of  Panama. 

ARTICLE   II 

The  Republic  of  Panama  grants  to  the  United  States  in  per- 
petuity the  use,  occupation  and  control  of  a  zone  of  land  and 
land  under  water  for  the  construction,  maintenance,  operation, 
sanitation  and  protection  of  said  canal  of  the  width  of  ten 
miles  extending  to  the  distance  of  five  miles  on  each  side  of 
the  center  line  of  the  route  of  the  canal  to  be  constructed;  the 
said  zone  beginning  in  the  Caribbean  Sea  three  marine  miles 
from  mean  low  water  mark  and  extending  to  and  across  the 
Isthmus  of  Panama  into  the  Pacific  Ocean  to  a  distance  of 
three  marine  miles  from  mean  low  water  mark  with  the  pro- 
viso that  the  cities  of  Panama  and  Colon  and  the  harbors  adja- 


The  Hay-Bunau-Varilla  Treaty      111 

cent  to  said  cities,  which  are  included  within  the  boundaries 
of  the  zone  above  described,  shall  not  be  included  within  this 
grant.  The  Republic  of  Panama  further  grants  to  the  United 
States  in  perpetuity  the  use,  occupation  and  control  of  any 
other  lands  and  waters  outside  of  the  zone  above  described 
which  may  be  necessary  and  convenient  for  the  construction, 
maintenance,  operation,  sanitation  and  protection  of  the  said 
Canal  or  of  any  auxiliary  canals  or  other  works  necessary 
and  convenient  for  the  construction,  maintenance,  operation, 
sanitation  and  protection  of  said  enterprise. 

The  Republic  of  Panama  further  grants  in  like  manner  to 
the  United  States  in  perpetuity  all  islands  within  the  limits  of 
the  zone  above  described  and  in  addition  thereto  the  group  of 
small  islands  in  the  Bay  of  Panama,  named  Perico,  Naos, 
Culebra  and  Flamenco. 

ARTICLE   III 

The  Republic  of  Panama  grants  to  the  United  States  all  the 
rights,  power  and  authority  within  the  zone  mentioned  and 
described  in  Article  II  of  this  agreement  and  within  the 
limits  of  all  auxiliary  lands  and  waters  mentioned  and  de- 
scribed in  said  Article  II  which  the  United  States  would 
possess  and  exercise  if  it  were  the  sovereign  of  the  territory 
within  which  said  lands  and  waters  are  located  to  the  entire 
exclusion  of  the  exercise  by  the  Republic  of  Panama  of  any 
such  sovereign  rights,  power  or  authority. 

ARTICLE   IV 

As  rights  subsidiary  to  the  above  grants  the  Republic  of 
Panama  grants  in  perpetuity  to  the  United  States  the  right 
to  use  the  rivers,  streams,  lakes  and  other  bodies  of  water 
within  its  limits  for  navigation,  the  supply  of  water  or  water- 
power  or  other  purposes,  so  far  as  the  use  of  said  rivers, 
streams,  lakes  and  bodies  of  water  and  the  waters  thereof  may 
be  necessary  and  convenient  for  the  construction,  maintenance, 
operation,  sanitation  and  protection  of  the  said  Canal. 


112      The  Hay-Bunau-Varilla  Treaty 

ARTICLE  V 

The  Republic  of  Panama  grants  to  the  United  States  in 
perpetuity  a  monopoly  for  the  construction,  maintenance  and 
operation  of  any  system  of  communication  by  means  of  canal 
or  railroad  across  its  territory  between  the  Caribbean  Sea  and 
the  Pacific  Ocean. 

ARTICLE  VI 

The  grants  herein  contained  shall  in  no  manner  invalidate 
the  titles  or  rights  of  private  land  holders  or  owners  of  pri- 
vate property  in  the  said  zone  or  in  or  to  any  of  the  lands 
or  waters  granted  to  the  United  States  by  the  provisions  of 
any  Article  of  this  treaty,  nor  shall  they  interfere  with  the 
rights  of  way  over  the  public  roads  passing  through  the  said 
zone  or  over  any  of  the  said  lands  or  waters  unless  said  rights 
of  way  or  private  rights  shall  conflict  with  rights  herein 
granted  to  the  United  States  in  which  case  the  rights  of  the 
United  States  shall  be  superior.  All  damages  caused  to  the 
owners  of  private  lands  or  private  property  of  any  kind  by 
reason  of  the  grants  contained  in  this  treaty  or  by  reason  of 
the  operations  of  the  United  States,  its  agents  or  employes, 
or  by  reason  of  the  construction,  maintenance,  operation, 
sanitation  and  protection  of  the  said  Canal  or  of  the  works 
of  sanitation  and  protection  herein  provided  for,  shall  be  ap- 
praised and  settled  by  a  joint  Commission  appointed  by  the 
Governments  of  the  United  States  and  the  Republic  of 
Panama,  whose  decisions  as  to  such  damages  shall  be  final  and 
whose  awards  as  to  such  damages  shall  be  paid  solely  by  the 
United  States.  No  part  of  the  work  on  said  Canal  or  the 
Panama  Railroad  or  on  any  auxiliary  works  relating  thereto 
and  authorized  by  the  terms  of  this  treaty  shall  be  prevented, 
delayed  or  impeded  by  or  pending  such  proceedings  to  as- 
certain such  damages.  The  appraisal  of  said  private  lands 
and  private  property  and  the  assessment  of  damages  to 
them  shall  be  based  upon  their  value  before  the  date  of  this 
convention. 


The  Hay-Bunau-Varilla  Treaty      113 

ARTICLE  VII 

'The  Republic  of  Panama  grants  to  the  United  States 
within  the  limits  of  the  cities  of  Panama  and  Colon  and  their 
adjacent  harbors  and  within  the  territory  adjacent  thereto 
the  right  to  acquire  by  purchase  or  by  the  exercise  of  the 
right  of  eminent  domain,  any  lands,  buildings,  water  rights 
or  other  properties  necessary  and  convenient  for  the  con- 
struction, maintenance,  operation  and  protection  of  the 
Canal  and  of  any  works  of  sanitation,  such  as  the  collec- 
tion and  disposition  of  sewage  and  the  distribution  of  water 
in  the  said  cities  of  Panama  and  Colon,  which,  in  the  dis- 
cretion of  the  United  States  may  be  necessary  and  con- 
venient for  the  construction,  maintenance,  operation,  sanita- 
tion and  protection  of  the  said  Canal  and  railroad.  All  such 
works  of  sanitation,  collection  and  disposition  of  sewage  and 
distribution  of  water  in  the  cities  of  Panama  and  Colon 
shall  be  made  at  the  expense  of  the  United  States,  and  the 
Government  of  the  United  States,  its  agents  or  nominees 
shall  be  authorized  to  impose  and  collect  water  rates  and 
sewerage  rates  which  shall  be  sufficient  to  provide  for  the 
payment  of  interest  and  the  amortization  of  the  principal 
of  the  cost  of  said  works  within  a  period  of  fifty  years  and 
upon  the  expiration  of  said  term  of  fifty  years  the  system 
of  sewers  and  water  works  shall  revert  to  and  become  the 
properties  of  the  cities  of  Panama  and  Colon  respectively, 
and  the  use  of  the  water  shall  be  free  to  the  inhabitants  of 
Panama  and  Colon,  except  to  the  extent  that  water  rates  may 
be  necessary  for  the  operation  and  maintenance  of  said  system 
of  sewers  and  water. 

The  Republic  of  Panama  agrees  that  the  cities  of  Panama 
and  Colon  shall  comply  in  perpetuity  with  the  sanitary  or- 
dinances whether  of  a  preventive  or  curative  character  pre- 
scribed by  the  United  States  and  in  case  the  Government 
of  Panama  is  unable  or  fails  in  its  duty  to  enforce  this  com- 
pliance by  the  cities  of  Panama  and  Colon  with  the  sanitary 
ordinances   of  the   United    States  the  Republic  of  Panama 


114      The  Hay-Bunau-Varilla  Treaty 

grants  to  the  United  States  the  right  and  authority  to  enforce 
the  same. 

The  same  right  and  authority  are  granted  to  the  United 
States  for  the  maintenance  of  public  order  in  the  cities  of 
Panama  and  Colon  and  the  territories  and  harbors  adjacent 
thereto  in  case  the  Republic  of  Panama  should  not  be,  in  the 
judgment  of  the  United  States,  able  to  maintain  such  order. 

ARTICLE  VIII 

The  Republic  of  Panama  grants  to  the  United  States  all 
rights  which  it  now  has  or  hereafter  may  acquire  to  the  prop- 
erty of  the  New  Panama  Canal  Company  and  the  Panama 
Railroad  Company  as  a  result  of  the  transfer  of  sovereignty 
from  the  Republic  of  Colombia  to  the  Republic  of  Panama 
over  the  Isthmus  of  Panama  and  authorizes  the  New  Panama 
Canal  Company  to  sell  and  transfer  to  the  United  States  its 
rights,  privileges,  properties  and  concessions  as  well  as  the 
Panama  Railroad  and  all  the  shares  or  part  of  the  shares 
of  that  company;  but  the  public  lands  situated  outside  of 
the  Zone  described  in  Article  II  of  this  treaty  now  included 
in  the  concessions  to  both  said  enterprises  and  not  required 
in  the  construction  or  operation  of  the  Canal  shall  revert  to 
the  Republic  of  Panama  except  any  property  now  owned  by 
or  in  possession  of  said  companies  within  Panama  or  Colon 
or  the  ports  or  terminals  thereof. 

ARTICLE  IX 

The  United  States  agrees  that  the  ports  at  either  entrance 
of  the  Canal  and  the  waters  thereof,  and  the  Republic  of 
Panama  agrees  that  the  towns  of  Panama  and  Colon  shall  be 
free  for  all  time  so  that  there  shall  not  be  imposed  or  col- 
lected custom  house  tolls,  tonnage,  anchorage,  light-house, 
wharf,  pilot,  or  quarantine  dues  or  any  other  charges  or  taxes 
of  any  kind  upon  any  vessel  using  or  passing  through  the 
Canal  or  belonging  to  or  employed  by  the  United  States,  di- 
rectly   or    indirectly,    in    connection    with    the    construction, 


The  Hay-Bunau-Varilla  Treaty      115 

maintenance,  operation,  sanitation  and  protection  of  the  main 
Canal,  or  auxiliary  works,  or  upon  the  cargo,  officers,  crew 
or  passengers  of  any  such  vessels,  except  such  tolls  and 
charges  as  may  be  imposed  by  the  United  States  for  the  use 
of  the  Canal  and  other  works,  and  except  tolls  and  charges 
imposed  by  the  Republic  of  Panama  upon  merchandise  des- 
tined to  be  introduced  for  the  consumption  of  the  rest  of 
the  Republic  of  Panama,  and  upon  vessels  touching  at  the 
ports  of  Colon  and  Panama  and  which  do  not  cross  the  Canal. 
The  Government  of  the  Republic  of  Panama  shall  have  the 
right  to  establish  in  such  ports  and  in  the  towns  of  Panama 
and  Colon  such  houses  and  guards  as  it  may  deem  necessary 
to  collect  duties  on  importations  destined  to  other  portions  of 
Panama  and  to  prevent  contraband  trade.  The  United  States 
shall  have  the  right  to  make  use  of  the  towns  and  harbors 
of  Panama  and  Colon  as  places  of  anchorage,  and  for  making 
repairs,  for  loading,  unloading,  depositing,  or  trans-shipping 
cargoes  either  in  transit  or  destined  for  the  service  of  the 
Canal  and  for  other  works  pertaining  to  the  Canal. 

ARTICLE  X 

The  Republic  of  Panama  agrees  that  there  shall  not  be  im- 
posed any  taxes,  national,  municipal,  departmental,  or  of 
any  other  class,  upon  the  Canal,  the  railways  and  auxiliary 
works,  tug's  and  other  vessels  employed  in  the  service  of  the 
Canal,  store  houses,  work  shops,  offices,  quarters  for  laborers, 
factories  of  all  kinds,  warehouses,  wharves,  machinery,  and 
other  works,  property,  and  effects  appertaining  to  the  Canal 
or  railroad  and  auxiliary  works,  or  their  officers  or  employees, 
situated  within  the  cities  of  Panama  and  Colon,  and  that  there 
shall  not  be  imposed  contributions  or  charges  of  a  personal 
character  of  any  kind  upon  officers,  employees,  laborers,  and 
other  individuals  in  the  service  of  the  Canal  and  railroad 
and  auxiliary  works. 

ARTICLE   XI 

The  United   States   agrees  that   the   official   dispatches   of 


116      The  Hay-Bunau-Varilla  Treaty 

the  Government  of  the  Republic  of  Panama  shall  be  trans- 
mitted over  any  telegraph  and  telephone  lines  established  for 
Canal  purposes  and  used  for  public  and  private  business  at 
rates  not  higher  than  those  required  from  officials  in  the  service 
of  the  United  States. 

ARTICLE   XII 

The  Government  of  the  Republic  of  Panama  shall  permit 
the  immigration  and  free  access  to  the  lands  and  workshops 
of  the  Canal  and  its  auxiliary  works  of  all  employees  and 
workmen  of  whatever  nationality  under  contract  to  work 
upon  or  seeking  employment  upon  or  in  any  wise  connected 
with  the  said  Canal  and  its  auxiliary  works,  with  their  re- 
spective families,  and  all  such  persons  shall  be  free  and  ex- 
empt from  the  military  service  of  the  Republic  of  Panama. 

ARTICLE  XIII 

The  United  States  may  import  at  any  time  into  the  said 
zone  and  auxiliary  lands,  free  of  customs  duties,  imposts, 
taxes,  or  other  charges,  and  without  any  restrictions,  any  and 
all  vessels,  dredges,  engines,  cars,  machinery,  tools,  explosives, 
materials,  supplies,  and  other  articles  necessary  and  conven- 
ient in  the  construction,  maintenance,  operation,  sanitation 
and  protection  of  the  Canal  and  auxiliary  works,  and  all  pro- 
visions, medicines,  clothing,  supplies  and  other  things  neces- 
sary and  convenient  for  the  officers,  employees,  workmen  and 
laborers  in  the  service  and  employ  of  the  United  States  and 
for  their  families.  If  any  such  articles  are  disposed  of  for 
use  outside  of  the  zone  and  auxiliary  lands  granted  to  the 
United  States  and  within  the  territory  of  the  Republic,  they 
shall  be  subject  to  the  same  import  or  other  duties  as  like  ar- 
ticles imported  under  the  laws  of  the  Republic  of  Panama. 

article  xiv 

As  the  price  or  compensation  for  the  rights,  powers  and 
privileges   granted   in   this   convention   by   the   Republic   of 


The  Hay-Bunau-Varilla  Treaty      117 

Panama  to  the  United  States,  the  Government  of  the  United 
States  agrees  to  pay  to  the  Republic  of  Panama  the  sum  of 
ten  million  dollars  ($10,000,000)  in  gold  coin  of  the  United 
States  on  the  exchange  of  the  ratification  of  this  convention 
and  also  an  annual  payment  during  the  life  of  this  conven- 
tion of  two  hundred  and  fifty  thousand  dollars  ($250,000)  in 
like  gold  coin,  beginning  nine  years  after  the  date  aforesaid. 

The  provisions  of  this  Article  shall  be  in  addition  to  all 
other  benefits  assured  to  the  Republic  of  Panama  under  this 
convention. 

But  no  delay  or  difference  of  opinion  under  this  Article  or 
any  other  provisions  of  this  treaty  shall  affect  or  interrupt 
the  full  operation  and  effect  of  this  convention  in  all  other 


ARTICLE  XV 

The  joint  commission  referred  to  in  Article  VI  shall  be  es- 
tablished as  follows: 

The  President  of  the  United  States  shall  nominate  two 
persons  and  the  President  of  the  Republic  of  Panama  shall 
nominate  two  persons  and  they  shall  proceed  to  a  decision; 
but  in  case  of  disagreement  of  the  Commission  (by  reason 
of  their  being  equally  divided  in  conclusion)  an  umpire  shall 
be  appointed  by  the  two  Governments  who  shall  render  the 
decision.  In  the  event  of  the  death,  absence,  or  incapacity 
of  a  Commissioner  or  Umpire,  or  of  his  omitting,  declining 
or  ceasing  to  act,  his  place  shall  be  filled  by  the  appointment 
of  another  person  in  the  manner  above  indicated.  All  de- 
cisions by  a  majority  of  the  Commission  or  by  the  umpire 
shall  be  final. 

ARTICLE  xvi 

The  two  Governments  shall  make  adequate  provision  by 
future  agreement  for  the  pursuit,  capture,  imprisonment,  de- 
tention and  delivery  within  said  zone  and  auxiliary  lands  to 
the  authorities  of  the  Republic  of  Panama  of  persons  charged 
with  the  commitment  of  crimes,  felonies  or  misdemeanors  with- 


118      The  Hay-Bunau-Varilla  Treaty 

out  said  zone  and  for  the  pursuit,  capture,  imprisonment, 
detention  and  delivery  without  said  zone  to  the  authorities  of 
the  United  States  of  persons  charged  with  the  commitment  of 
crimes,  felonies  and  misdemeanors  within  said  zone  and  aux- 
iliary lands. 

ARTICLE   XVII 

The  Republic  of  Panama  grants  to  the  United  States  the 
use  of  all  the  ports  of  the  Republic  open  to  commerce  as 
places  of  refuge  for  any  vessels  employed  in  the  Canal  enter- 
prise, and  for  all  vessels  passing  or  bound  to  pass  through 
the  Canal  which  may  be  in  distress  and  be  driven  to  seek 
refuge  in  said  ports.  Such  vessels  shall  be  exempt  from  an- 
chorage and  tonnage  dues  on  the  part  of  the  Republic  of 
Panama. 

ARTICLE  XVIII 

The  Canal,  when  constructed,  and  the  entrances  thereto 
shall  be  neutral  in  perpetuity,  and  shall  be  opened  upon  the 
terms  provided  for  by  Section  I  of  Article  three  of,  and  in 
conformity  with  all  the  stipulations  of,  the  Treaty  entered 
into  by  the  Governments  of  the  United  States  and  Great 
Britain  on  November  18,  1901. 

ARTICLE   XIX 

The  Government  of  the  Republic  of  Panama  shall  have  the 
right  to  transport  over  the  Canal  its  vessels  and  its  troops 
and  munitions  of  war  in  such  vessels  at  all  times  without 
paying  charges  of  any  kind.  The  exemption  is  to  be  extended 
to  the  auxiliary  railway  for  the  transportation  of  persons  in 
the  service  of  the  Republic  of  Panama,  or  of  the  police  force 
charged  with  the  preservation  of  public  order  outside  of  said 
zone,  as  well  as  to  their  baggage,  munitions  of  war  and  sup- 
plies. 

ARTICLE   XX 

If  by  virtue  of  any  existing  treaty  in  relation  to  the  ter- 
ritory  of   the  Isthmus  of  Panama,  whereof  the  obligations 


The  Hay-Bunau-Varilla  Treaty      119 

shall  descend  or  be  assumed  by  the  Republic  of  Panama, 
there  may  be  any  privilege  or  concession  in  favor  of  the 
Government  or  the  citizens  or  subjects  of  a  third  power  rela- 
tive to  an  interoceanic  means  of  communication  which  in  any 
of  its  terms  may  be  incompatible  with  the  terms  of  the  pres- 
ent convention,  the  Republic  of  Panama  agrees  to  cancel  or 
modify  such  treaty  in  due  form,  for  which  purpose  it  shall 
give  to  the  said  third  power  the  requisite  notification  within 
the  term  of  four  months  from  the  date  of  the  present  conven- 
tion, and  in  case  the  existing  treaty  contains  no  clause  per- 
mitting its  modifications  or  annulment,  the  Republic  of  Pan- 
ama agrees  to  procure  its  modification  of  annulment  in  such 
form  that  there  shall  not  exist  any  conflict  with  the  stipula- 
tions of  the  present  convention. 

ARTICLE  XXI 

The  rights  and  privileges  granted  by  the  Republic  of  Pan- 
ama to  the  United  States  in  the  preceding  Articles  are  under- 
stood to  be  free  of  all  anterior  debts,  liens,  trusts,  or  liabil- 
ities, or  concessions  or  privileges  to  other  Governments,  cor- 
porations, syndicates  or  individuals,  and  consequently,  if  there 
should  arise  any  claims  on  account  of  the  present  concessions 
and  privileges  or  otherwise,  the  claimants  shall  resort  to  the 
Government  of  the  Republic  of  Panama  and  not  to  the 
United  States  for  any  indemnity  or  compromise  which  may 
be  required. 

ARTICLE   XXII 

The  Republic  of  Panama  renounces  and  grants  to  the 
United  States  the  participation  to  which  it  might  be  entitled 
in  the  future  earnings  of  the  Canal  under  Article  XV  of  the 
concessionary  contract  with  Lucien  N.  B.  Wyse  now  owned 
by  the  New  Panama  Canal  Company  and  any  and  all  other 
rights  or  claims  of  a  pecuniary  nature  arising  under  or  re- 
lating to  said  concession,  or  arising  under  or  relating  to  the 
concessions  to  the  Panama  Railroad  Company  or  any  exten- 
sion or  modification  thereof;  and  it  likewise  renounces,  con- 


120      The  Hay-Bunau-Varilla  Treaty 

firms  and  grants  to  the  United  States,  now  and  hereafter,  all 
the  rights  and  property  reserved  in  the  said  concessions  which 
otherwise  would  belong  to  Panama  at  or  before  the  expira- 
tion of  the  terms  of  ninety-nine  years  of  the  concessions 
granted  to  or  held  by  the  above  mentioned  party  and  com- 
panies, and  all  right,  title  and  interest  which  it  now  has  or 
may  hereafter  have,  in  and  to  the  lands,  canal,  works,  prop- 
erty and  rights  held  by  the  said  companies  under  said  con- 
cessions or  otherwise,  and  acquired  or  to  be  acquired  by  the 
United  States  from  or  through  the  New  Panama  Canal  Com- 
pany, including  any  property  and  rights  which  might  or  may 
in  the  future  either  by  lapse  of  time,  forfeiture  or  'other- 
wise, revert  to  the  Republic  of  Panama  under  any  contracts 
or  concessions,  with  said  Wyse,  the  Universal  Panama  Canal 
Company,  the  Panama  Railroad  Company  and  the  New  Pan- 
ama Canal  Company. 

The  aforesaid  rights  and  property  shall  be  and  are  free 
and  released  from  any  present  or  reversionary  interest  or 
claims  of  Panama  and  the  title  of  the  United  States  thereto 
upon  consummation  of  the  contemplated  purchase  by  the 
United  States  from  the  New  Panama  Canal  Company,  shall 
be  absolute,  so  far  as  concerns  the  Republic  of  Panama,  ex- 
cepting always  the  rights  of  the  Republic  specifically  secured 
Under  this  treaty. 

ARTICLE  XXIII 

If  it  should  become  necessary  at  any  time  to  employ  armed 
forces  for  the  safety  or  protection  of  the  Canal,  or  of  the 
ships  that  make  use  of  the  same,  or  the  railways  and  auxil- 
iary works,  the  United  States  shall  have  the  right,  at  all 
times  and  in  its  discretion,  to  use)  its  police  and  its  land  and 
naval  forces  or  to  establish  fortifications  for  these  purposes. 

ARTICLE   XXIV 

No  change  either  in  the  Government  or  in  the  laws  and 
treaties  of  the  Republic  of  Panama  shall,  without  the  con- 
sent of  the  United   States,  affect  any  right  of  the  United 


The  Hay-Bunau-Varilla  Treaty      121 

States  under  the  present  convention,  or  under  any  treaty 
stipulation  between  the  two  countries  that  now  exists  or 
may  hereafter  exist  touching  the  subject  matter  of  this  con- 
vention. 

If  the  Republic  of  Panama  shall  hereafter  enter  as  a  con- 
stituent into  any  other  Government  or  into  any  union  or 
confederation  of  states,  so  as  to  merge  her  sovereignty  or  in- 
dependence in  such  Government,  union  or  confederation,  the 
rights  of  the  United  States  under  this  convention  shall  not  be 
in  any  respect  lessened  or  impaired. 

ARTICLE  XXV 

For  the  better  performance  of  the  engagements  of  this  con- 
vention and  to  the  end  of  the  efficient  protection  of  the  Canal 
and  the  preservation  of  its  neutrality,  the  Government  of 
the  Republic  of  Panama  will  sell  or  lease  to  the  United  States 
lands  adequate  and  necessary  for  naval  or  coaling  stations  on 
the  Pacific  Coast  and  on  the  western  Caribbean  Coast  of  the 
Republic  at  certain  points  to  be  agreed  upon  with  the  Presi- 
dent of  the  United  States. 

ARTICLE  XXVI 

This  convention  when  signed  by  the  Plenipotentiaries  of 
the  Contracting  Parties  shall  be  ratified  by  the  respective  Gov- 
ernments and  the  ratifications  shall  be  exchanged  at  Wash- 
ington at  the  earliest  date  possible. 

In  faith  whereof  the  respective  Plenipotentiaries  have 
signed  the  present  convention  in  duplicate  and  have  hereunto 
affixed  their  respective  seals. 

Done  at  the  City  of  Washington  the  18th  day  of  November 
in  the  year  of  our  Lord  nineteen  hundred  and  three. 

John  Hay  [seal] 

P.  Bunau  Varilla     [seal] 


122          The  Suez  Canal  Convention 


THE  SUEZ  CANAL  CONVENTION 

(Signed  at  Constantinople  October  29th,  1888.) 
Her  Majesty  the  Queen  of  the  United  Kingdom  of  Great 
Britain  and  Ireland,  Empress  of  India;  His  Majesty  the  Em- 
peror of  Germany,  King  Of  Prussia;  His  Majesty  the  Em- 
peror of  Austria,  King  of  Bohemia,  etc.,  and  Apostolic  King 
of  Hungary ;  His  Majesty  the  King  of  Spain,  and  in  his  name 
the  Queen  Regent  of  the  Kingdom ;  the  President  of  the  French 
Republic;  His  Majesty  the  King  of  Italy;  His  Majesty  the 
King  of  the  Netherlands,  Grand  Duke  of  Luxemburg,  etc.; 
His  Majesty  the  Emperor  of  All  the  Russias;  and  His 
Majesty  the  Emperor  of  the  Ottomans;  wishing  to  establish, 
by  a  conventional  act,  a  definite  system  destined  to  guarantee 
at  all  times,  and  for  all  the  powers,  the  free  use  of  the 
Suez  Maritime  Canal,  and  thus  to  complete  the  system  under 
which  the  navigation  of  this  canal  has  been  placed  by  the  fir- 
man of  His  Imperial  Majesty  the  Sultan,  dated  the  22nd 
February,  1866  (2  Zilkade,  1282),  and  sanctioning  the  conces- 
sions of  His  Highness  the  Khedive,  have  named  their  pleni- 
potentiaries. 

ARTICLE  I 

The  Suez  Maritime  Canal  shall  always  be  free  and  open, 
in  time  of  war  as  in  time  of  peace,  to  every  vessel  of  com- 
merce or  of  war,  without  distinction  of  flag. 

Consequently,  the  high  contracting  parties  agree  not  in  any 
way  to  interfere  with  the  free  use  of  the  canal,  in  time  of  war 
as  in  time  of  peace. 

The  canal  shall  never  be  subjected  to  the  exercise  of  the  right 
of  blockade. 

ARTICLE  II 

The  high  contracting'  parties,  recognizing  that  the  fresh- 
water canal  is  indispensable  to  the  maritime  canal,  take  note 
of  the  engagements  of  His  Highness  the  Khedive  towards  the 
Universal  Suez  Canal  Co.  as  regards  the  fresh-water  canal; 


The  Suez  Canal  Convention         123 

which  engagements  are  stipulated  in  a  convention  bearing  date 
the  18th  March,  1863,  containing  an  expose  and  four  articles. 
They  undertake  not  to  interfere  in  any  way  with  the  se- 
curity of  that  canal  and  its  branches,  the  working  of  which 
shall  not  be  exposed  to  any  attempt  at  obstruction. 

ARTICLE   III 

The  high  contracting  parties  likewise  undertake  to  respect 
the  plant,  establishments,  buildings,  and  works  of  the  mari- 
time canal  and  the  fresh-water  canal. 

ARTICLE  IV 

The  maritime  canal  remaining  open  in  time  of  war  as  a 
free  passage,  even  to  the  ships  of  war  of  belligerents,  accord- 
ing to  the  terms  of  Article  I  of  the  present  treaty,  the  high 
contracting  parties  agree  that  no  right  of  war,  no  act  of  hos- 
tility, nor  any  act  having  for  its  object  to  obstruct  the  free 
navigation  of  the  canal,  shall  be  committed  in  the  canal  and 
its  ports  of  access,  as  well  as  within  a  radius  of  3  marine 
miles  from  those  ports,  even  though  the  Ottoman  Empire 
should  be  one  of  the  belligerent  powers. 

Vessels  of  war  of  belligerents  shall  not  revictual  or  take  in 
stores  in  the  canal  and  its  ports  of  access,  except  in  so  far  as 
may  be  strictly  necessary.  The  transit  of  the  aforesaid  vessels 
through  the  canal  shall  be  effected  with  the  least  possible  de- 
lay, in  accordance  with  the  regulations  in  force,  and  with- 
out any  other  intermission  than  that  resulting  from  the  neces- 
sities of  the  service. 

Their  stay  at  Port  Said  and  in  the  roadstead  of  Suez  shall 
not  exceed  24  hours,  except  in  case  of  distress.  In  such  case 
they  shall  be  bound  to  leave  as  soon  as  possible.  An  inter- 
val of  24  hours  shall  always  elapse  between  the  sailing  of  a 
belligerent  ship  from  one  of  the  ports  of  access  and  the 
departure  of  a  ship  belonging  to  the  hostile  power: 

ARTICLE  v 

In  time  of  war  belligerent  powers  shall  not  disembark  nor 


124         The  Suez  Canal  Convention 

embark  within  the  canal  and  its  ports  of  access  either  troops, 
munitions,  or  materials  of  war.  But  in  case  of  an  accidental 
hindrance  in  the  canal  men  may  be  embarked  or  disembarked 
at  the  ports  of  access  by  detachments  not  exceeding  1,000  men, 
with  a  corresponding  amount  of  war  material. 

ARTICLE  VI 

Prizes  shall  be  subjected,  in  all  respects,  to  the  same  rules 
as  the  vessels  of  war  of  belligerents. 

ARTICLE   VII 

The  powers  shall  not  keep  any  vessel  of  war  in  the  waters 
of  the  canal  (including  Lake  Timsah  and  the  Bitter  Lakes). 

Nevertheless,  they  may  station  vessels  of  war  in  the  ports  of 
access  of  Port  Said  and  Suez,  the  number  of  which  shall  not 
exceed  two  for  each  power. 

This  right  shall  not  be  exercised  by  belligerents. 

ARTICLE  VIII 

The  agents  in  Egypt  of  the  signatory  powers  of  the  present 
treaty  shall  be  charged  to  watch  over  its  execution.  In  case  of 
any  event  threatening  the  security  of  the  free  passage  of  the 
canal,  they  shall  meet  on  the  summons  of  three  of  their  num- 
ber, under  the  presidency  of  their  doyen,  in  order  to  proceed 
to  the  necessary  verifications.  They  shall  inform  the  Khedivial 
Government  of  the  danger  which  they  may  have  perceived,  in 
order  that  that  Government  may  take  proper  steps  to  insure 
the  protection  and  the  free  use  of  the  canal.  Under  any 
circumstances,  they  shall  meet  once  a  year  to  take  note  of  the 
due  execution  of  the  treaty. 

The  last-mentioned  meetings  shall  take  place  under  the 
presidency  of  a  special  commissioner  nominated  for  that  pur- 
pose by  the  Imperial  Ottoman  Government.  A  commissioner 
of  the  Khedive  may  also  take  part  in  the  meeting,  and  may 
preside  over  it  in  case  of  the  absence  of  the  Ottoman  com- 
missioner. 


The  Suez  Canal  Convention         125 

They  shall  especially  demand  the  suppression  of  any  work 
or  the  dispersion  of  any  assemblage  on  either  bank  of  the 
canal,  the  object  or  effect  of  which  might  be  to  interfere  with 
the  liberty  and  the  entire  security  of  the  navigation. 

ARTICLE  IX 

The  Egyptian  Government  shall,  within  the  limits  of  its 
powers  resulting  from  the  Firmans,  and  under  the  conditions 
provided  for  in  the  present  treaty,  take  the  necessary  meas- 
ures for  insuring  the  execution  of  the  said  treaty. 

In  case  the  Egyptian  Government  should  not  have  sufficient 
means  at  its  disposal,  it  shall  call  upon  the  Imperial  Ottoman 
Government,  which  shall  take  the  necessary  measures  to  re- 
spond to  such  appeal;  shall  give  notice  thereof  to  the  signa- 
tory powers  of  the  declaration  of  London  of  the  17th  March, 
1885 ;  and  shall,  if  necessary,  concert  with  them  on  the  subject. 

The  provisions  of  Articles  IV,  V,  VII  shall  not  interfere 
with  the  measures  which  shall  be  taken  in  virtue  of  the  present 
article. 

article  x 

Similarly,  the  provisions  of  Articles  IV,  V,  and  VIII  shall 
not  interfere  with  the  measures  which  His  Majesty  the  Sul- 
tan and  His  Highness  the  Khedive,  in  the  name  of  His  Im- 
perial Majesty,  and  within  the  limits  of  the  firmans  granted, 
might  find  it  necessary  to  take  for  securing  by  their  own 
forces  the  defense  of  Egypt  and  the  maintenance  of  public 
order. 

In  case  His  Imperial  Majesty  the  Sultan  or  His  Highness 
the  Khedive  should  find  it  necessary  to  avail  themselves  of  the 
exceptions  for  which  this  article  provides,  the  signatory  pow- 
ers of  the  declaration  of  London  shall  be  notified  thereof  by 
the  Imperial  Ottoman  Government. 

It  is  likewise  understood  that  the  provisions  of  the  four 
articles  aforesaid  shall  in  no  case  occasion  any  obstacle 
to  the  measures  which  the  Imperial  Ottoman  Government  may 
think  it  necessary  to  take  in  order  to  insure  by  its  own  forces 


126          The  Suez  Canal  Convention 

the  defense  of  its  other  possessions  situated  on  the  eastern 
coast  of  the  Red  Sea. 

AETICLE  XI 

The  measures  which  shall  be  taken  in  the  cases  provided  for 
by  Articles  IX  and  X  of  the  present  treaty  shall  not  interfere 
with  the  free  use  of  the  canal.  In  the  same  cases  the  erection 
of  permanent  fortifications  contrary  to  the  provisions  of  Ar- 
ticle VIII  is  prohibited. 

ARTICLE  XII 

The  high  contracting  parties,  by  application  of  the  principle 
of  equality  as  regards  the  free  use  of  the  canal,  a  principle 
which  forms  one  of  the  bases  of  the  present  treaty,  agree  that 
none  of  them  shall  endeavor  to  obtain  with  respect  to  the  canal 
territorial  or  commercial  advantages  or  privileges  in  any  inter- 
national arrangements  which  may  be  concluded.  Moreover, 
the  rights  of  Turkey  as  the  territorial  power  are  reserved. 

ARTICLE  XIII 

With  the  exception  of  the  obligations  expressly  provided 
by  the  clauses  of  the  present  treaty,  the  sovereign  rights  of 
His  Imperial  Majesty  the  Sultan,  and  the  rights  and  immuni- 
ties of  His  Highness  the  Khedive,  resulting  from  the  firmans, 
are  in  no  way  affected. 

ARTICLE  xiv 
The  high  contracting  parties  agree  that  the  engagements  re- 
sulting from  the  present  treaty  shall  not  be  limited  by  the 
duration  of  the  act  of  concession  of  the  Universal  Suez  Canal 
Company. 

ARTICLE  XV 

The  stipulations  of  the  present  treaty  shall  not  interfere 
with  the  sanitary  measures  in  force  in  Egypt. 

ARTICLE  XVI 

The  high  contracting  parties  undertake  to  bring  the  present 


Negotiations  of  Treaty  127 

treaty  to  the  knowledge  of  the  States  which  have  not  signed  it, 
inviting  them  to  accede  to  it. 

ARTICLE   XVII 

The  present  treaty  shall  be  ratified,  and  the  ratifications 
shall  be  exchanged  at  Constantinople  within  the  space  of  one 
month,  or  sooner  if  possible. 

In  faith  of  which  the  respective  plenipotentiaries  have  signed 
the  present  treaty  and  have  affixed  to  it  the  seal  of  their 
arms. 

Done  at  Constantinople,  the  29th  day  of  the  month  of  Octo- 
ber, in  the  year  1888. 

[l.  s.]  W.  A.  White, 

[l.  s.]  Radowitz. 

[l.  s.]  Calice. 

[l.  s.]  Miguel  Florezy  Garcia. 

[l.  s.]  C.  De  Montebello. 

[l.  s.]  A.  Blanc. 

[l.  s.]  Gus  Keun. 

[l.  s.]  Nelidow. 

. .  [l.  s.]  M.  Said. 


NEGOTIATION  OF  THE  HAY-PAUNCEFOTE 
TREATY 

Prepared  by  Mr.  Hay. 


The  Senate's  amendments  to  the  former  treaty  required 
(first)  that  there  should  be  in  plain  and  explicit  terms  an  ex- 
press abrogation  of  the  Clayton-Bulwer  treaty;  (second)  that 
the  rules  of  neutrality  adopted  should  not  deprive  the  United 
States  of  the  right  to  defend  itself  and  to  maintain  public  or- 
der; and  (third)  that  other  powers  should  not  in  any  manner 
be  made  parties  to  the  treaty  by  being  invited  to  adhere  to  it. 

For  a  better  understanding  of  the  scheme  of  the  new  treaty, 


128  Negotiations  of  Treaty 

it  may  be  well  briefly  to  advert  to  the  objections  suggested  by 
Great  Britain  to  these  several  amendments. 

AS    TO    THE    ABROGATION"    OF    THE    CLAYTON -BULWER    TREAT? 

Lord  Lansdowne's  objections  were  as  to  the  manner  of 
doing  this  and  as  to  the  substance.  It  was  insisted  that  in 
the  negotiations  which  led  to  the  making  of  the  former  treaty 
no  attempt  had  been  made  to  ascertain  the  views  of  the  Brit- 
ish Government  on  such  complete  abrogation,  and  that  the 
Clayton-Bulwer  treaty  being,  as  it  claimed,  an  international 
compact  of  unquestionable  validity,  could  not  be  abrogated 
without  the  consent  of  both  parties  to  the  contract. 

There  was  in  this  connection  an  apparent  misconception  on 
the  part  of  His  Majesty's  Government  in  respect  to  the  proper 
function  of  the  Senate  in  advising  the  ratification  of  a  treaty 
with  amendments  proposed  by  it.  It  seemed  to  be  regarded 
as  an  attempt  on  the  part  of  the  Senate  to  accomplish  by  its 
own  vote,  as  a  final  act,  the  abrogation  of  an  existing  treaty, 
without  an  opportunity  for  full  consideration  of  the  matter 
by  the  other  party.  It  was  overlooked  that  the  Senate  was 
simply  exercising  its  undoubted  constitutional  function  of  pro- 
posing amendments  to  be  communicated  to  the  other  party  to 
the  contract,  to  ascertain  its  views  upon  the  question,  and  it 
was  hoped  by  the  President — and  the  hope  was  expressed  in 
submitting  the  treaty  as  amended  by  the  Senate  to  the  British 
Government — 'that  the  amendments  would  be  found  acceptable 
by  it.  Failing  this,  there  was  a  full  opportunity  for  His  Ma- 
jesty's Government,  by  counter  propositions,  to  express  its 
views  on  this  and  the  other  amendments,  and  so  by  a  continu- 
ous negotiation  to  arrive,  if  possible,  at  a  mutually  satisfactory 
solution  of  all  questions  involved.  Nevertheless,  in  view  of 
the  great  importance  of  the  Senate's  amendments,  taken  to- 
gether, it  was  deemed  more  expedient  by  Lord  Lansdowne  to 
reject  them,  but  to  leave  the  door  open  for  fresh  negotiations, 
which  might  have  a  more  happy  issue;  and  he  earnestly  depre- 
cated a  final  failure  of  the  parties  to  agree,  and  emphatically 


Negotiations  of  Treaty  129 

expressed  the  desire  of  his  Government  to  meet  the  views  of 
the  United  States  on  this  most  important  matter. 

The  principal  substantial  objection  to  the  Senate's  amend- 
ments, completely  superseding  the  Clayton-Bulwer  treaty,  was 
that  if  this  were  done,  the  provisions  of  Article  I  of  that 
treaty,  which  had  been  left  untouched  by  the  original  Hay- 
Pauncefote  treaty,  would  be  annulled,  and  thereby  both  powers 
would,  except  in  the  vicinity  of  the  canal,  acquire  entire  free- 
dom of  action  in  Central  America,  a  change  which  Lord 
Lansdowne  thought  would  certainly  be  of  advantage  to  the 
United  States,  and  might  be  of  substantial  importance. 

AS  TO  THE  RIGHT  OF  THE  UNITED  STATES,  NOTWITHSTANDING 
THE  NEUTRAL  RULES  ADOPTED  BY  THE  TREATY,  TO  DEFEND 
ITSELF  BY  ITS  OWN  FORCES,  AND  TO  SECURE  THE  MAINTENANCE 
OF  PUBLIC  ORDER,  COVERED  BY  WHAT  WAS  GENERALLY  KNOWN 
AS   THE  DAVIS  AMENDMENT. 

His  Majesty's  Government  criticised  the  vagueness  of  the 
language  employed  in  the  amendment,  and  the  absence  of  all 
security  as  to  the  manner,  in  which  its  ends  might  at  some  fu- 
ture time  be  interpreted;  but  thought  that,  however  precisely 
it  might  be  worded,  it  would  be  impossible  to  determine  what 
might  be  the  effect  if  one  clause  permitting  defensive  meas- 
ures and  another  clause  (which  has  now  been  omitted)  pro- 
hibiting fortification  of  the  canal  were  allowed  to  stand  side 
by  side  in  the  same  convention. 

This  amendment  was  strenuously  objected  to  by  Great  Brit- 
ain as  involving  a  distinct  departure  from  the  principle  of 
neutrality  which  had  theretofore  found  acceptance  by  both 
Governments,  inasmuch  as  it  would,  as  construed  by  Lord 
Lansdowne,  permit  the  United  States  in  time  of  peace  as 
well  as  in  time  of  war  to  resort  to  whatever  warlike  acts  it 
pleased  in  and  near  the  canal,  which  would  be  clearly  incon- 
sistent with  its  intended  neutral  character  and  would  deprive 
the  commerce  and  navies  of  the  world  of  the  free  use  of  it. 

It  was  insisted  that  by  means  of  the  amendment  the  obliga- 


130  Negotiations  of  Treaty 

tion  of  Great  Britain  to  respect  the  neutrality  of  the  canal 
under  all  circumstances  would  remain  in  force,  while  that  of 
the  United  States,  on  the  other  hand,  would  be  essentially 
modified,  and  that  this  would  result  in  a  one-sided  agreement, 
by  which  Great  Britain  would  be  debarred  from  any  warlike 
act  in  or  near  the  canal,  while  the  United  States  could  resort 
to  any  such  acts,  even  in  time  of  peace,  which  it  might  deem 
necessary  to  secure  its  own  safety. 

Moreover,  it  was  insisted  by  this  amendment,  in  connec- 
tion with  the  third  amendment,  which  excluded  other  powers 
from  becoming  parties  to  the  contract,  Great  Britain  would 
be  placed  at  a  great  disadvantage  as  compared  with  all  other 
powers,  inasmuch  as  she  alone,  with  all  her  vast  interests  in 
the  commerce  of  the  world,  would  be  bound  under  all  circum- 
stances to  respect  the  neutrality  of  the  canal,  while  the 
United  States,  even  in  time  of  peace,  would  have  a  treaty  right 
to  interfere  with  the  canal  on  the  plea  of  necessity  for  its 
own  safety,  and  all  other  powers  not  being  bound  by  the 
treaty  could  at  their  pleasure  disregard  its  provisions. 

AS  TO  THE  AMENDMENT  STRIKING  OUT  THE  ARTICLE  IN  THE 
TREATY  AS  SUBMITTED  TO  THE  SENATE,  WHICH  PROVIDED  FOR 
AN  INVITATION  TO  THE  OTHER  POWERS  TO  COME  IN  AND  AD- 
HERE TO   IT. 

This  was  emphatically  objected  to  because  if  acquiesced  in 
by  Great  Britain  she  would  be  bound  by  what  Lord  Lansdowne 
described  as  the  "stringent  rules  of  neutral  conduct"  pre- 
scribed by  the  treaty,  which  would  not  be  equally  binding 
upon  the  other  powers,  and  it  was  urged  that  the  adhesion  of 
other  powers  to  the  treaty  as  parties  would  furnish  an  addi- 
tional security  for  the  neutrality  of  the  canal. 

In  the  hope  of  reconciling  the  conflicting  views  thus  pre- 
sented between  the  former  treaty  as  amended  by  the  Senate 
and  the  objections  thereto  of  the  British  Government,  the 
treaty  now  submitted  for  the  consideration  of  the  Senate  was 
drafted. 


Negotiations  of  Treaty  131 

The  substantial  differences  from  the  former  treaty  are  as 
follows : 

First.  In  the  new  draft  of  treaty  the  provision  superseding 
the  Clayton-Buhuer  treaty  as  a  whole,  instead  of  being  paren- 
thetically inserted,  as  by  the  former  Senate  amendment,  was 
made  the  subject  of  an  independent  article  and  presented  as 
the  first  article  of  the  treaty.  It  was  thus  submitted  to  the 
consideration  of  the  British  Government  in  connection  with 
the  other  substantial  provisions  of  the  treaty  which  declared 
the  neutrality  of  the  canal  for  the  use  of  all  nations  on  terms 
of  entire  equality. 

Second.  By  a  change  in  the  first  line  of  Article  III,  instead 
of  the  United  States  and  Great  Britain  jointly  adopting  as 
the  basis  of  the  neutralization  of  the  canal,  the  rules  of  neu- 
trality prescribed  for  its  use  as  was  provided  by  the  former 
treaty,  the  United  States  now  alone  adopts  them. 

This  was  regarded  as  a  very  radical  and  important  change 
and  one  which  would  go  far  toward  a  reconciliation  of  the 
conflicting  views  of  the  two  Governments. 

It  relieves  Great  Britain  of  all  responsibility  and  obligation 
to  enforce  the  neutrality  of  the  canal,  which  by  the  former 
treaty  had  been  imposed  upon  or  assumed  by  her  jointly  with 
the  United  States,  and  thus  meets  the  main  stress  of  the  ob- 
jection which  seemed  to  underlie  or  be  interwoven  with  her 
other  objections  to  the  former  Senate  amendments.  The 
United  States  alone  as  the  sole  owner  of  the  canal,  as  a 
purely  American  enterprise,  adopts  and  prescribes  the  rules 
by  which  the  use  of  the  canal  shall  be  regulated,  and  assumes 
the  entire  responsibility  and  burden  of  enforcing,  without 
the  assistance  of  Great  Britain  or  any  other  nation,  its  absolute 
neutrality. 

It  was  also  believed  that  this  change  would  be  in  harmony 
with  the  national  wish  that  this  great  interoceanic  waterway 
should  not  only  be  constructed  and  owned,  but  exclusively 
controlled  and  managed  by  the  United  States. 

Third.  The  next  important  change  from  the  former  treaty 


132  Negotiations  of  Treaty 

consists  in  the  omission  of  the  words  "in  time  of  war  as  in 
time  of  peace"  from  clause  1  of  Article  III. 

No  longer  insisting  upon  the  language  of  the  Davis  amend- 
ment— which  had  in  terms  reserved  to  the  United  States  ex- 
press permission  to  disregard  the  rules  of  neutrality  pre- 
scribed, when  necessary  to  secure  its  own  defense,  which  the 
Senate  had  apparently  deemed  necessary  because  of  the  pro- 
vision in  Rule  I,  that  the  canal  should  be  free  and  open  "in 
time  of  war  as  in  time  of  peace"  to  the  vessels  of  all  nations — 
it  was  considered  that  the  omission  of  the  words  "in  time  of 
war  as  in  time  of  peace"  would  dispense  with  the  necessity 
of  the  amendment  referred  to,  and  that  war  between  the  con- 
tracting parties,  or  between  the  United  States  and  any  other 
power,  would  have  the  ordinary  effect  of  war  upon  treaties 
when  not  specially  otherwise  provided,  and  would  remit  both 
parties  to  their  original  and  natural  right  of  self-defense  and 
give  to  the  United  States  the  clear  right  to  close  the  canal 
against  the  other  belligerent,  and  to  protect  it  and  defend  itself 
by  whatever  means  might  be  necessary. 

Fourth.  In  conformity  with  the  Senate's  emphatic  rejection 
of  Article  III  of  the  former  treaty,  which  provided  that  the 
high  contracting  parties  would,  immediately  upon  the  exchange 
of  ratifications,  bring  it  to  the  notice  of  other  powers  and  invite 
them  to  adhere  to  it,  no  such  provision  was  inserted  in  the 
draft  of  the  new  treaty. 

It  was  believed  that  the  declaration  that  the  canal  should  be 
free  and  open  to  all  nations  on  terms  of  entire  equality  (now 
that  Great  Britain  was  relieved  of  all  responsibility  and  obli- 
gation to  enforce  and  defend  its  neutrality)  would  practically 
meet  the  force  of  the  objection  which  had  been  made  by  Lord 
Lansdowne  to  the  Senate's  excision  of  the  article  inviting  the 
other  powers  to  come  in,  viz.,  that  Great  Britain  was  placed 
thereby  in  a  worse  position  than  other  nations  in  case  of  war 
with  the  United  States. 

Fifth.  The  next  change  from  the  former  treaty  is  the  omis- 
sion of  the  provision  in  clause  7  of  Article  III,  which  prohib- 


Negotiations  of  Treaty  133 

ited  the  fortification  of  the  canal,  and  the  transfer  to  clause  2 
of  the  remaining  provision  of  clause  7,  that  the  United  States 
shall  be  at  liberty  to  maintain  such  military  police  along  the 
canal  as  may  be  necessary  to  protect  it  against  lawlessness  and 
disorder. 

The  whole  theory  of  the  treaty  is  that  the  canal  is  to  be  an 
entirely  American  canal.  The  enormous  cost  of  constructing  it 
is  to  be  borne  by  the  United  States  alone.  When  constructed, 
it  is  to  be  exclusively  the  property  of  the  United  States  and 
is  to  be  managed,  controlled,  and  defended  by  it.  Under  these 
circumstances,  and  considering  that  now  by  the  new  treaty 
Great  Britain  is  relieved  of  all  the  responsibility  and  burden 
of  maintaining  its  neutrality  and  security,  it  was  thought  en- 
tirely fair  to  omit  the  prohibition  that  "no  fortification  shall 
be  erected  commanding  the  canal  or  the  waters  adjacent." 

Sixth.  It  will  be  observed  that,  although  the  words  "in  time 
of  war  as  in  time  of  peace"  had  been  omitted  from  clause  1  of 
Article  III  upon  the  theory  that  the  omission  of  these  words 
would  dispense  with  the  necessity  of  the  Davis  amendment, 
and  that  war  between  the  United  States  and  any  other  power 
would  have  the  ordinary  effect  of  war  upon  treaties  and  remit 
both  parties  to  their  natural  right  of  self-defense — the  same 
words  are  retained  in  the  sixth  clause  of  Article  III,  which 
provides  that  the  plant,  establishment,  buildings,  and  all  works 
necessary  to  the  construction,  maintenance,  and  operation  of 
the  canal  shall  be  deemed  part  of  it  for  the  purposes  of  this 
treaty,  and  "in  time  of  war  as  in  time  of  peace"  shall  enjoy 
complete  immunity  from  attack  or  injury  by  belligerents  and 
from  acts  calculated  to  impair  their  usefulness. 

(It  was  considered  that  such  specific  provision  was  in  the 
general  interest  of  commerce  and  of  civilization,  and  that  all 
nations  would  regard  such  a  work  as  sacred  under  all  cir- 
cumstances. 

It  was  hoped  that  the  changes  above  enumerated  from  the 
former  treaty  would  practically  reconcile  the  conflicting  con- 
tentious of  the  two  Governments  and  would  lead  to  the  much- 


134  Negotiations  of  Treaty 

desired  result  of  an  entire  concurrence  of  views  between  them. 

With  the  exception  of  these  changes  care  was  taken  in  the 
draft  of  the  new  treaty  to  preserve  the  exact  language,  which 
had  passed  both  the  Senate  and  the  British  Government  with- 
out objection,  and,  as  is  believed,  without  criticism. 

The  hope  that  the  changes  thus  made  had  effectually  met 
the  British  objections  to  the  former  treaty  as  amended  by 
the  Senate  was  almost  realized. 

The  proposed  draft  of  the  new  treaty  was  transmitted  to 
Lord  Lansdowne,  and  after  mature  deliberation  he  proposed 
on  the  part  of  His  Majesty's  Government  only  three  sub- 
stantial amendments. 

He  recognized  the  weighty  importance  of  the  change  by 
which  Great  Britain  was  relieved  of  all  responsibility  for  en- 
forcing the  neutrality  and  maintaining  the  security  of  the 
canal,  and  that  all  this  burden  was  solely  assumed  by  the 
United  States.  He  also  appreciated  the  importance  of  the 
other  proposed  changes  in  the  direction  of  harmony. 

Under  this  modified  aspect  of  the  relations  of  the  two  na- 
tions to  the  canal,  he  was  not  indisposed  to  consent  to  the  ab- 
rogation of  the  Clayton-Bulwer  treaty  if  the  "general  princi- 
ple" of  neutrality,  which  was  reaffirmed  in  the  preamble  of 
the  new  treaty  as  well  as  of  the  former  one,  should  be  preserved 
and  secured  against  any  change  of  sovereignty  or  other  change 
of  circumstances  in  the  territory  through  which  the  canal  is 
intended  to  pass,  and  that  the  rules  adopted  as  the  basis  of 
neutralization  should  govern,  as  far  as  possible,  all  interoceanic 
communication  across  the  Isthmus.  He  referred  in  this  con- 
nection to  Articles  I  and  VIII  of  the  Clayton-Bulwer  treaty. 

He  therefore  proposed,  by  way  of  amendment,  the  insertion 
of  an  additional  article,  on  the  acceptance  of  which  His  Maj- 
esty's Government  would  be  inclined  to  withdraw  its  objection 
to  the  formal  abrogation  of  the  Clayton-Bulwer  treaty. 

The  amendment  thus  proposed  by  him  was  in  the  following 
language,  viz. : 

In  view  of  the  permanent  character  of  this  treaty,  whereby  the 


Negotiations  of  Treaty  135 

general  principle  established  by  Article  VIII  of  the  Clayton-Bulwer 
treaty  is  reaffirmed,  the  high  contracting  parties  hereby  declare 
that  the  rules  laid  down  in  the  last  preceding  article  shall,  so  far 
as  they  may  be  applicable,  govern  all  interoceanic  communication 
across  the  Isthmus  which  connects  North  and  South  America,  and 
that  no  change  of  territorial  sovereignty  or  other  change  of  circum- 
stances shall  affect  such  general  principle  or  the  obligations  of  the 
high  contracting  parties  under  this  treaty. 

This  proposed  article  was  regarded  by  the  President  as  too 
far-reaching  for  the  purpose  in  view,  and  as  converting  the 
vague  and  indefinite  provisions  of  the  eighth  article  of  the 
Clayton-Bulwer  treaty,  which  contemplated  only  future  treaty 
stipulations  when  any  new  route  should  prove  to  he  practicable, 
into  a  very  definite  and  certain  present  treaty,  fastening  the 
crystallized  rules  of  neutrality  adopted  now  for  this  canal 
upon  every  other  interoceanic  communication  across  the  Isth- 
mus, and  as  perpetuating  in  a  more  definite  and  extended  form, 
by  a  sort  of  reenactment  of  the  eighth  article,  the  embarrass- 
ing effects  of  the  Clayton-Bulwer  treaty,  of  which  the  United 
States  hoped  to  be  relieved  altogether. 

He  believed  that  now  that  a  canal  is  about  to  be  built  at  the 
sole  cost  of  the  United  States  for  the  equal  benefit  of  all  na- 
tions, it  was  sufficient  for  the  present  treaty  to  provide  for  that 
one  canal,  and  that  it  was  hardly  within  the  range  of  possi- 
bility that  the  United  States  would  ever  build  more  than  one 
canal  between  the  two  oceans. 

The  President  was,  however,  not  only  willing,  but  desirous, 
that  the  "general  principle"  of  neutralization  referred  to  in 
the  preamble  of  this  treaty  should  be  applicable  to  this  canal 
now  intended  to  be  built,  notwithstanding  any  change  of  sov- 
ereignty or  of  international  relations  of  the  territory  through 
which  it  should  pass.  This  "general  principle"  of  neutraliza- 
tion had  always  in  fact  been  insisted  upon  by  the  United 
States,  and  he  recognized  the  entire  justice  of  the  request 
of  Great  Britain  that  if  she  should  now  surrender  the  material 
interest  which  had  been  secured  to  her  by  the  first  article 
of  the  Clayton-Bulwer  treaty,  which  might  result  in  the  in- 
definite future  should   the   territory  traversed  by  the   canal 


136  Negotiations  of  Treaty 

undergo   a   change   of   sovereignty,   this   "general    principle" 
should  not  be  thereby  affected  or  impaired. 

These  views  were  communicated  to  His  Majesty's  Govern- 
ment, and  as  a  substitute  for  the  article  proposed  by  Lord 
Lansdowne  the  following  was  proposed  on  the  part  of  the 
United  States: 

It  is  agreed  that  no  change  of  territorial  sovereignty  or  of  the 
international  relations  of  the  country  or  countries  traversed  by  the 
before-mentioned  canal  shall  affect  the  general  principle  of  neu- 
tralization, or  the  obligations  of  the  high  contracting  parties  under 
the  present  treaty. 

Upon  a  full  exchange  of  views,  this  article  proposed  by  the 
United  States  was  accepted  by  Great  Britain  and  becomes 
Article  IV  of  the  treaty  now  submitted.  It  is  thought  to  do 
entire  justice  to  the  reasonable  demands  of  Great  Britain  in 
preserving  the  general  principle  of  neutralization  and  at  the 
same  time  to  relieve  the  United  States  of  the  vague,  indefinite, 
and  embarrassing  obligations  imposed  by  the  eighth  article 
of  the  Clayton-Bulwer  treaty. 

During  the  discussions  upon  this  article  it  was  suggested 
that  although  no  particular  route  was  mentioned  in  the  pro- 
posed treaty  as  the  route  to  be  traversed  by  the  canal,  yet  as 
the  canal  had  been  so  commonly  mentioned  as  the  "Nicaragua 
Canal,"  and  the  intended  treaty  as  the  "Nicaragua  Canal 
treaty,"  it  might  possibly  be  claimed  that  the  treaty  did  not 
apply  to  a  canal  by  the  Panama  route,  or  by  any  other  possi- 
ble route.  But  it  had  always  been  intended  by  the  President 
that  the  treaty  should  apply  to  the  canal  which  should  be  first 
constructed,  by  whichever  or  whatever  route,  and  to  remove 
the  apprehension  referred  to  and  to  exclude  all  possible  doubt 
in  the  matter,  it  was  agreed  that  the  preamble  should  be 
amended  by  inserting  in  the  preamble  after  the  word  "oceans" 
the  words  "by  whatever  route  may  be  considered  expedient" 

His  Majesty's  Government  at  first  strenuously  objected  to 
the  absence  from  the  treaty  of  any  provision  for  other  powers 


Negotiations  of  Treaty  137 

coining  in,  so  as  to  be  bound  by  its  terms.  It  protested  against 
being  bound  by  what  it  regarded  as  stringent  rules  of  neu- 
trality which  should  not  be  equally  binding  upon  other  powers. 
Lord  Lansdowne  accordingly  proposed  the  following  amend- 
ment, viz.: 

To  insert  in  Rule  I  of  Article  III,  after  the  word  "nation,"  the 
words  "which  shall  agree  to  observe  these  rules,"  and  in  the  fol- 
lowing line,  after  the  word  "nation,"  the  words  "so  agreeing,"  so 
as  to  make  the  clause  read : 

"1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce 
and  of  war  of  all  nations  which  shall  agree  to  observe  these  rules, 
on  terms  of  entire  equality,  so  that  there  shall  be  no  discrimination 
against  any  nation  so  agreeing,"  etc. 

The  President,  however,  could  not  consent  to  this  amend- 
ment, because  he  apprehended  that  it  might  be  construed  as 
making  the  other  powers  parties  to  the  contract  and  as  giving 
them  contract  rights  in  the  canal,  and  that  it  would  thus  prac- 
tically restore  to  the  treaty  the  substance  of  the  provision 
which  the  Senate  had  struck  out  as  Article  III  of  the  former 
treaty.  He  believed  also  that  there  was  a  strong  national  feel- 
ing against  giving  to  the  other  powers  anything  in  the  nature 
of  a  contract  right  in  an  affair  so  peculiarly  American  as  the 
canal;  that  no  other  powers  had  now  any  right  in  the  prem- 
ises or  anything  to  give  up  or  part  with  as  consideration  for 
acquiring  such  a  contract  right;  that  they  are  to  rely  on  the 
good  faith  of  the  United  States  in  its  declaration  to  Great 
Britain  in  this  treaty;  and  that  it  adopts  the  rules  and  prin- 
ciples of  neutralization  there  set  forth.  These  rules  are 
adopted  in  the  treaty  with  Great  Britain  as  a  consideration  for 
getting  rid  of  the  Clayton-Bulwer  treaty,  and  the  only  way  in 
Avhich  other  nations  are  bound  by  them  is  that  they  must  com- 
ply with  them  if  they  would  use  the  canal. 

It  was  also  apparent  that  the  proposed  amendment  if  ac- 
cepted would  make  Rule  I  more  objectionable  than  the  third 
article  of  the  former  treaty,  which  was  stricken  out  by  the 
Senate's  amendment,  for  that  only  invited  other  powers  to 


138  Negotiations  of  Treaty 

come  in  and  become  parties  to  the  contract  after  ratification, 
whereas  the  proposed  provision  would  rather  compel  other 
powers  to  come  in  and  become  parties  to  the  contract  in  the 
first  instance  as  a  condition  precedent  to  the  use  of  the  canal 
by  them. 

Upon  due  consideration  of  these  suggestions,  and  at  the 
same  time  to  put  all  the  other  powers  upon  the  same  footing, 
viz.,  that  they  could  use  the  canal  only  by  complying  with  the 
rules  of  neutrality  adopted  and  prescribed — an  amendment  to 
Lord  Lansdowne's  amendment  was  proposed  and  agreed  upon, 
viz.: 

To  strike  out  from  his  amendment  the  words,  "which  shall  agree 
to  observe"  and  substitute  therefor  the  word  "observing,"  and  in 
the  next  line  to  strike  out  the  words  "so  agreeing,"  and  to  insert 
before  the  word  "nation"  the  word  "such." 

This  made  the  clause  as  finally  agreed  upon  and  found  in 
the  treaty  as  now  submitted  for  the  consideration  of  the  Sen- 
ate: 

The  canal  shall  be  free  and  open  to  the  vessels  of  commerce  and 
of  war  of  all  nations  observing  these  rules  on  terms  of  entire 
equality,  so  that  there  shall  be  no  discrimination  against  any  such 
nation,  etc. 

Thus  the  whole  idea  of  contract  right  in  the  other  powers 
is  eliminated,  and  the  vessels  of  any  nation  which  shall  refuse 
or  fail  to  observe  the  rules  adopted  and  prescribed  may  be  de- 
prived of  the  use  of  the  canal. 

One  other  amendment  proposed  by  Lord  Lansdowne  was 
regarded  by  the  President  as  so  entirely  reasonable  that  it 
was  agreed  to  without  discussion.  This  was  the  insertion  at 
the  end  of  clause  1  of  Article  III  the  words :  "Such  conditions 
and  charges  of  traffic  shall  be  just  and  equitable"  and  the 
word  "convention,"  wherever  it  occurs,  has  been  changed  to 
"treaty." 

It  is  believed  that  this  memorandum  will  put  the  Senate 


Negotiations  of  Treaty  139 

Committee  on  Foreign  Relations  in  full  possession  of  the  his- 
tory of  all  changes  in  the  treaty  since  the  action  of  the  Senate 
on  the  former  amendment. 


No.  1. 

Lord  Pauncefote  to  the  Marquis  of  Lansdowne. 

Washington,  December  24,  1900. 

(Received  Jan.  7,  1901.) 
My  Lord:  I  have  the  honor  to  transmit  to  your  lordship  a 
copy  of  a  note  which  I  have  received  from  the  United  States 
Secretary  of  State,  formally  announcing  to  me,  for  the  infor- 
mation of  Her  Majesty's  Government,  the  ratification  of  the 
Nicaragua  Canal  treaty  by  the  Senate  on  the  20th  instant, 
with  three  amendments. 

Mr.  Hay,  after  giving  the  text  of  those  amendments,  states 
that  he  has  instructed  the  United  States  ambassador  in  London 
to  express  to  your  lordship  the  hope  of  his  Government  that 
the  amendments  will  be  found  acceptable  to  that  of  Her  Maj- 
esty. 

I  have,  etc.,  Pauncefote. 


[Inclosure  1  in  No.  1.] 

Mr.  Hay  to  Lord  Pauncefote. 

Department  of  State, 
Washington,  December  22,  1900. 
Excellency:  I  have  the  honor  to  inform  you  that  the 
Senate  by  its  resolution  of  the  20th  December  last,  has  given 
its  advice  and  consent  to  the  ratification  of  the  convention, 
signed  at  Washington  on  the  5th  of  February  last  by  the  re- 
spective plenipotentiaries  of  the  United  States  and  Great 
Britain,  to  facilitate  the  construction  of  a  ship  canal  to  connect 
the  Atlantic  and  Pacific  oceans  and  to  remove  any  objection 


140  Negotiations  of  Treaty 

which  might  arise  out  of  the  convention  commonly  called  the 
Clayton-Bulwer  treaty,  with  the  following  amendments: 

1.  After  the  words  "Clayton-Bulwer  convention"  and  before 
the  word  "adopt"  in  the  preamble  of  Article  II,  the  words 
"which  convention  is  hereby  superseded"  are  inserted. 

2.  A  new  paragraph  is  added  to  the  end  of  section  5  of 
Article  II  in  the  following  language: 

It  is  agreed,  however,  that  none  of  the  immediately  foregoing 
conditions  and  stipulations  in  sections  numbered  1,  2,  3,  4,  and  5 
of  this  article  shall  apply  to  measures  which  the  United  States 
may  find  it  necessary  to  take  for  securing  by  its  own  forces  the 
defense  of  the  United  States  and  the  maintenance  of  public  order. 

3.  Article  III  reading: 

The  high  contracting  parties  will,  immediately  upon  the  exchange 
of  the  ratifications  of  this  convention,  bring  it  to  the  notice  of  the 
other  powers,  and  invite  them  to  adhere  to  it — 

is  stricken  out. 

4.  Article  IV  is  made  Article  III. 

I  inclose  a  printed  copy  of  the  convention  as  signed,1  and 
a  copy  of  it  showing  its  reading  as  amended  by  the  Senate. 

I  have  instructed  Mr.  Choate  to  express  to  the  Marquis  of 
Lansdowne  this  Government's  hope  that  the  amendments  will 
be  found  acceptable  to  that  of  Her  Majesty. 

The  supplementary  convention  which  I  signed  with  you  on 
the  5th  May  last,  prolonging  the  time  within  which  the  ratifi- 
cations of  the  convention  of  the  5th  February  last  shall  be 
exchanged,  for  a  period  of  seven  months  from  the  5th  August 
last,  has  been  consented  to  by  the  Senate  without  amendment. 
I  have,  etc.  John,  Hay. 


[Inclosure  in  No.  1.] 
Convention  of  February  5,  1900,  as  amended  by  the  Senate. 
The  United  States  of  America,  and  Her  Majesty,  the  Queen 
i  See  United  States  No.  1  (1900.) 


Negotiations  of  Treaty  141 

of  the  United  Kingdom  of  Great  Britain  and  Ireland,  Empress 
of  India,  being  desirous  to  facilitate  the  construction  of  a 
ship  canal  to  connect  the  Atlantic  and  Pacific  Oceans,  and  to 
that  end  to  remove  any  objection  which  may  arise  out  of  the 
convention  of  the  19th  April,  1850,  commonly  called  the  Clay- 
ton-Bulwer  treaty,  to  the  construction  of  such  canal  under  the 
auspices  of  the  Government  of  the  United  States,  without  im- 
pairing the  "general  principle"  of  neutralization  established 
in  Article  VIII  of  that  convention,  have  for  that  purpose  ap- 
pointed as  their  plenipotentiaries: 

The  President  of  the  United  States,  John  Hay,  Secretary 
of  State  of  the  United  States  of  America; 

And  Her  Majesty  the  Queen  of  Great  Britain  and  Ireland, 
Empress  of  India,  the  Right  Honorable  Lord  Pauncefote, 
G.C.B.,  G.C.M.G.,  Her  Majesty's  ambassador  extraordinary 
and  plenipotentiary  to  the  United  States; 

Who,  having  communicated  to  each  other  their  full  powers, 
which  were  found  to  be  in  due  and  proper  form,  have  agreed 
upon  the  following  articles: 

ARTICLE  I 

It  is  agreed  that  the  canal  may  be  constructed  under  the 
auspices  of  the  Government  of  the  United  States,  either  di- 
rectly at  its  own  cost,  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations  or  through  subscription  to  or  purchase 
of  stock  or  shares,  and  that,  subject  to  the  provisions  of  the 
present  convention,  the  said  Government  shall  have  and  enjoy 
all  the  rights  incident  to  such  construction,  as  well  as  the  ex- 
clusive right  of  providing  for  the  regulation  and  management 
of  the  canal. 

ARTICLE   II 

The  high  contracting  parties,  desiring  to  preserve  and  main- 
tain the  "general  principle"  of  neutralization  established  in 
Article  VIII  of  the  Clayton-Bulwer  convention,  which  conven- 
tion is  hereby  superseded,  adopt,  as  the  basis  of  such  neutrali- 


142  Negotiations  of  Treaty 

zation,  the  following  rules,  substantially  as  embodied  in  the 
convention  between  Great  Britain  and  certain  other  powers, 
signed  at  Constantinople,  the  29th  October,  1888,  for  the  free 
navigation  of  the  Suez  Maritime  Canal,  that  is  to  say : 

1.  The  canal  shall  be  free  and  open,  in  time  of  war  as  in 
time  of  peace,  to  the  vessels  of  commerce  and  of  war  of  all 
nations,  on  terms  of  entire  equality,  so  that  there  shall  be  no 
discrimination  against  any  nation  or  its  citizens  or  subjects 
in  respect  of  the  conditions  or  charges  of  traffic,  or  otherwise. 

2.  The  canal  shall  never  be  blockaded,  nor  shall  any  right 
of  war  be  exercised  nor  any  act  of  hostility  be  committed 
within  it. 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual  nor 
take  any  stores  in  the  canal  except  so  far  as  may  be  strictly 
necessary;  and  the  transit  of  such  vessels  through  the  canal 
shall  be  effected  with  the  least  possible  delay,  in  accordance 
with  the  regulations  in  force,  and  with  only  such  intermission 
as  may  result  from  the  necessities  of  the  service. 

Prizes  shall  be  in  all  respects  subject  to  the  same  rules  as 
vessels  of  war  of  the  belligerents. 

4.  No  belligerent  shall  embark  or  disembark  troops,  muni- 
tions of  war,  or  warlike  materials  in  the  canal  except  in  case  of 
accidental  hindrance  of  the  transit,  and  in  such  case  the  transit 
shall  be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  article  shall  apply  to  waters  adja- 
cent to  the  canal,  within  3  marine  miles  of  either  end.  Ves- 
sels of  war  of  a  belligerent  shall  not  remain  in  such  waters 
longer  than  twenty-four  hours  at  any  one  time  except  in  case 
of  distress,  and  in  such  case  shall  depart  as  soon  as  possible; 
but  a  vessel  of  war  of  one  belligerent  shall  not  depart  within 
twenty-four  hours  from  the  departure  of  a  vessel  of  war  of 
the  other  belligerent. 

It  is  agreed,  however,  that  none  of  the  immediately  fore- 
going conditions  and  stipulations  in  sections  numbered  1,  2,  3, 
4,  and  5  of  this  article  shall  apply  to  measures  which  the 
United  States  may  find  it  necessary  to  take  for  securing  by 


Negotiations  of  Treaty  143 

its  own  forces  the  defense  of  the  United  States  and  the  main- 
tenance of  public  order. 

6.  The  plan  I:,  establishments,  buildings,  and  all  works  nec- 
essary to  the  construction,  maintenance,  and  operation  of  the 
canal  shall  be  deemed  to  be  part  thereof,  for  the  purposes  of 
this  convention,  and  in  time  of  war  as  in  time  of  peace,  shall 
enjoy  complete  immunity  from  attack  or  injury  by  belligerents 
and  from  acts  calculated  to  impair  their  usefulness  as  part 
of  the  canal. 

7.  No  fortifications  shall  be  erected  commanding  the  canal 
or  the  waters  adjacent.  The  United  States,  however,  shall  be 
at  liberty  to  maintain  such  military  police  along  the  canal  as 
may  be  necessary  to  protect  it  against  lawlessness  and  disor- 
der. 

ARTICLE  III 

The  present  convention  shall  be  ratified  by  the  President  of 
the  United  States,  by  and  with  the  advice  and  consent  of  the 
Senate  thereof,  and  by  Her  Britannic  Majesty,  and  the  rati- 
fications shall  be  exchanged  at  Washington  or  at  London,  within 
six  months  from  the  date  hereof,  or  earlier,  if  possible. 

In  faith  whereof  the  respective  plenipotentiaries  have  signed 
this  convention  and  thereunto  affixed  their  seals. 

Done  in  duplicate  at  Washington,  the  5th  day  of  February, 
in  the  year  of  our  Lord,  1900. 

John  Hay. 
Pauncefote. 


No.  2. 
The  Marquis  of  Lansdowne  to  Lord  Pauncefote. 

Foreign  Office,  February  22,  1901. 
My  Lord:   The  American  ambassador  has  formally  com- 
municated to  me  the  amendments  introduced  by  the   Senate 
of  the  United  States  into  the  convention,  signed  at  Washing- 


144  Negotiations  of  Treaty 

ton  in  February  last,  to  facilitate  the  construction  of  a  ship 
canal  to  connect  the  Atlantic  and  Pacific  Oceans. 
These  amendments  are  three  in  number,  namely : 

1.  The  insertion  in  Article  II,  after  the  reference  to  Article 
VIII,  of  the  Clayton-Bulwer  Convention,  of  the  words  "which 
convention  is  hereby  superseded." 

2.  The  addition  of  a  new  paragraph  after  section  5  of 
Article  II  in  the  following  terms: 

It  is  agreed,  however,  that  none  of  the  immediately  foregoing 
conditions  and  stipulations  in  sections  numbered  1,  2,  3,  4,  and  5 
of  this  article  shall  apply  to  measures  which  the  United  States 
may  find  it  necessary  to  take  for  securing  by  its  own  forces  the 
defense  of  the  United  States  and  the  maintenance  of  public  order. 

3.  The  excision  of  Article  III,  which  provides  that — 

The  high  contracting  parties  will,  immediately  upon  the  ex- 
change of  the  ratifications  of  this  convention,  bring  it  to  the 
notice  of  other  powers  and  invite  them  to  adhere  to  it. 

Mr.  Choate  was  instructed  to  express  the  hope  that  the 
amendments  would  be  found  acceptable  by  Her  Majesty's 
Government. 

It  is  our  duty  to  consider  them  as  they  stand,  and  to  inform 
your  excellency  of  the  manner  in  which,  as  the  subject  is  now 
presented  to  us,  we  are  disposed  to  regard  them. 

It  will  be  useful,  in  the  first  place,  to  recall  the  circum- 
stances in  which  negotiations  for  the  conclusion  of  an  agree- 
ment supplementary  to  the  convention  of  1850,  commonly 
called  the  Clayton-Bulwer  Treaty,  were  initiated. 

So  far  as  Her  Majesty's  Government  were  concerned,  there 
was  no  desire  to  procure  a  modification  of  that  convention. 
Some  of  its  provisions  had,  however,  for  a  long  time  past  been 
regarded  with  disfavor  by  the  Government  of  the  United 
States,  and  in  the  President's  message  to  Congress  of  Decem- 
ber, 1898,  it  was  suggested,  with  reference  to  a  concession 
granted  by  the  Government  of  Nicaragua,  that  some  definite 
action  by  Congress  was  urgently  required  if  the  labors  of  the 


Negotiations  of  Treaty  145 

past  were  to  be  utilized,  and  the  linking  of  the  Atlantic  and 
Pacific  Oceans  by  a  practical  waterway  to  be  realized.  It  was 
further  urged  that  the  construction  of  such  a  maritime  high- 
way was  more  than  ever  indispensable  to  that  intimate  and 
ready  intercommunication  between  the  eastern  and  western 
seaboards  of  the  United  States  demanded  by  the  annexation 
of  the  Hawaiian  Islands  and  the  prospective  expansion  of 
American  influence  and  commerce  in  the  Pacific,  and  that  the 
national  policy  called  more  imperatively  than  ever  for  the 
"control"  of  the  projected  highway  by  the  Government  of  the 
United  States. 

This  passage  in  the  message  having  excited  comment,  your 
excellency  made  inquiries  of  the  Secretary  of  State  in  order 
to  elicit  some  information  as  to  the  attitude  of  the  President. 
In  reply,  the  views  of  the  United  States  Government  were 
very  frankly  and  openly  explained.  You  were  also  most  em- 
phatically assured  that  the  President  had  no  intention  what- 
ever of  ignoring  the  Clayton-Bulwer  Convention,  and  that  he 
would  ioyally  observe  treaty  stipulations.  But  in  view  of  the 
strong  national  feeling  in  favor  of  the  construction  of  the 
Nicaragua  Canal,  and  of  the  improbability  of  the  work  being 
accomplished  by  private  enterprise,  the  United  States  Gov- 
ernment were  prepared  to  undertake  it  themselves  upon  ob- 
taining the  necessary  powers  from  Congress.  For  that  pur- 
pose, however,  they  must  endeavor,  by  friendly  negotiation,  to 
obtain  the  consent  of  Great  Britain  to  such  a  modification  of 
the  Clayton-Bulwer  Treaty  as  would,  without  affecting  the 
"general  principle"  therein  declared,  enable  the  great  object  in 
view  to  be  accomplished  for  the  benefit  of  the  commerce  of  the 
world.  Although  the  time  had  hardly  arrived  for  the  insti- 
tution of  formal  negotiations  to  that  end,  Congress  not  hav- 
ing yet  legislated,  the  United  States  Government,  nevertheless, 
were  most  anxious  that  your  excellency  should  enter  at  once 
into  pourparlers  with  a  view  to  preparing,  for  consideration, 
a  scheme  of  arrangement. 


146  Negotiations  of  Treaty 

Her  Majesty's  Government  agreed  to  this  proposal,  and 
the  discussions  which  took  place  in  consequence  resulted  in 
the  draft  convention  which  Mr.  Hay  handed  to  your  excellency 
on  the  11th  January,  1899. 

At  that  time  the  joint  high  commission  over  which  the  late 
Lord  Herschell  presided  was  still  sitting.  That  commission 
was  appointed  in  July,  1898,  to  discuss  various  questions  at 
issue  between  Great  Britain  and  the  United  States,  namely,  the 
fur-seal  fishery,  the  fisheries  off  the  Atlantic  and  Pacific  coasts, 
the  Alaskan  boundary,  alien-labor  laws,  reciprocity,  transit  of 
merchandise,  mining  rights,  naval  vessels  on  the  Great  Lakes, 
definition  and  marking  of  frontiers,  and  conveyance  of  per- 
sons in  custody.  But  serious  difficulties  had  arisen  in  the 
attempt  to  arrive  at  an  understanding,  and  it  had  become 
doubtful  whether  any  settlement  would  be  effected. 

In  reply,  therefore,  to  a  request  for  a  speedy  answer  with 
regard  to  the  convention,  the  Marquis  of  Salisbury  informed 
Mr.  White,  the  American  charge  d'affaires,  that  he  could  not 
help  contrasting  the  precarious  prospects  and  slowness  of  the 
negotiations  which  were  being  conducted  by  Lord  Herschell 
with  the  rapidity  of  decision  proposed  in  the  matter  of  the 
convention.  Her  Majesty's  Government  might  be  reproached 
with  having  come  to  a  precipitate  agreement  on  a  proposal 
which  was  exclusively  favorable  to  the  United  States,  while 
they  had  come  to  no  agreement  at  all  on  the  contro- 
versy where  there  was  something  to  be  conceded  on  both 
sides. 

Shortly  afterwards  Lord  Herschell  intimated  that  the  dif- 
ficulties in  regard  to  the  question  of  the  Alaskan  boundary 
seemed  insuperable,  and  that  he  feared  it  might  be  necessary 
to  break  off  the  negotiations  of  which  he  had  hitherto  had  the 
charge.  Upon  this  Lord  Salisbury  informed  Mr.  White  that 
he  did  not  see  how  Her  Majesty's  Government  could  sanction 
any  convention  for  amending  the  Clayton-Bulwer  Treaty,  as 
the  opinion  of  this  country  would  hardly  support  them  in 
making  a  concession  which  would  be  wholly  to  the  benefit  of 


Negotiations  of  Treaty  147 

the  United  States,  at  a  time  when  they  appeared  to  be  so  little 
inclined  to  come  to  a  satisfactory  settlement  in  regard  to  the 
Alaskan  frontier. 

The  last  meeting  of  the  joint  high  commission  took  place 
on  the  20th  February,  1899.  Except  for  the  establishment  of 
a  modus  vivendi  on  the  Alaskan  frontier,  no  progress  has  been 
made  since  that  date  toward  the  adjustment  of  any  of  the 
questions  which  the  high  commissioners  were  appointed  to  dis- 
cuss. 

It  was  in  these  circumstances  that  the  proposal  for  a  canal 
convention  was  revived  at  the  beginning  of  last  year. 

On  the  21st  January  your  lordship  reported  that  a  bill, 
originally  introduced  in  1899,  had  been  laid  before  Congress, 
empowering  the  President  to  acquire  from  the  Republics  of 
Costa  Rica  and  Nicaragua  the  control  of  such  portion  of  ter- 
ritory as  might  be  desirable  or  necessary,  and  to  direct  the 
Secretary  of  War,  when  such  control  had  been  secured,  to 
construct  the  canal  and  make  such  provisions  for  defense  as 
might  be  required  for  the  safety  and  protection  of  the  canal 
and  the  terminal  harbors. 

It  was  probable  that  the  bill  would  be  passed,  and  it  was 
clear  that  additional  embarrassment  would  be  caused  by  an 
enactment  opposed  to  the  te^rms  of  the  proposed  convention, 
and  in  direct  violation  of  the  Clayton-Bulwer  Treaty.  On 
the  other  hand,  your  lordship's  information  led  to  the  con- 
fident expectation  that  the  convention  as  signed  would,  if 
agreed  to  by  Her  Majesty's  Government,  be  ratified  by  the 
Senate. 

In  these  circumstances  Her  Majesty's  Government  consented 
to  reopen  the  question,  and,  after  due  consideration,  deter- 
mined to  accept  the  convention  unconditionally,  as  a  signal 
proof  of  their  friendly  disposition  and  of  their  desire  not  to 
impede  the  execution  of  a  project  declared  to  be  of  national 
importance  to  the  people  of  the  United  States. 

Your  Excellency  stated  that  the  United  States  Government 
expressed  satisfaction  at  this  happy  result  and  appreciation 


148  Negotiations  of  Treaty 

of  the  conciliatory  disposition  shown  by  Her  Majesty's  Gov- 
ernment. 

The  convention  was  forthwith  submitted  to  the  Senate  for 
ratification,  and  on  the  9th  March  the  committee  charged  with 
its  examination  reported  in  favor  of  ratification,  with  the  in- 
sertion, subsequently  adopted,  after  section  5  of  Article  II,  of 
a  paragraph  containing  provision  that  the  rules  laid  down  in 
the  preceding  sections  should  not  apply  to  measures  for  the 
defense  of  the  United  States  by  its  own  forces  and  the  main- 
tenance of  public  order.  This  alteration  was  discussed  by  the 
Senate  in  secret  session  on  the  5th  April,  but  no  vote  was 
taken  upon  it  nor  upon  the  direct  question  of  ratification. 

The  bill  empowering  the  President  to  construct  and  pro- 
vide for  the  defense  of  the  canal  passed  the  House  of  Repre- 
sentatives by  a  large  majority  on  the  2d  of  May.  The  Sen- 
ate, however,  postponed  consideration  of  the  bill,  although, 
favorably  reported  by  the  Committee  on  Interoceanic  Canals. 

After  the  recess,  during  which  the  presidential  election  took 
place,  the  discussion  was  resumed  in  the  Senate.  On  the  20th 
of  December  the  vote  was  taken,  and  resulted  in  the  ratifica- 
tion of  the  convention  with  the  three  amendments  which  have 
been  presented  for  the  acceptance  of  His  Majesty's  Govern- 
ment. 

The  first  of  these  amendments,  that  in  Article  II,  declares 
the  Clayton-Bulwer  treaty  to  be  "hereby  superseded." 

Before  attempting  to  consider  the  manner  in  which  this 
amendment  will,  if  adopted,  affect  the  parties  to  the  Clayton- 
Bulwer  treaty,  I  desire  to  call  your  excellency's  attention  to 
a  question  of  principle  which  is  involved  by  the  action  of 
the  Senate  at  this  point. 

The  Clayton-Bulwer  Treaty  is  an  international  contract  of 
unquestionable  validity,  a  contract  which,  according  to  well- 
established  international  usage,  ought  not  to  be  abrogated  or 
modified,  save  with  the  consent  of  both  the  parties  to  the  con- 
tract.    In  spite  of  this  usage,  His  Majesty's  Government  find 


Negotiations  of  Treaty  149 

themselves  confronted  by  a  proposal  communicated  to  them 
by  the  United  States  Government,  without  any  previous  at- 
tempt to  ascertain  their  views,  for  the  abrogation  of  the 
Clayton-Bulwer  Treaty. 

The  practical  effect  of  the  amendment  can  best  be  understood 
by  reference  to  the  inclosed  copy  of  the  articles  of  the 
treaty,  Nos.  I  and  VI,  which,  assuming  that  the  United  States 
Government  would  undertake  all  the  obligations  imposed  by 
Article  IV  of  the  treaty,  contain  the  only  provisions  *  not  re- 
placed by  new  provisions,  covering  the  same  ground,  in  the 
convention. 

Under  Article  I  of  the  Clayton-Bulwer  Treaty  the  two  pow- 
ers agreed  that  neither  would  occupy  or  fortify  or  colonize, 
or  assume  or  exercise  any  dominion  over  any  part  of  Cen- 
tral America,  nor  attain  any  of  the  foregoing  objects  by  pro- 
tection afforded  to  or  alliance  with  any  State  or  people  of 
Central  America.  There  is  no  similar  agreement  in  the  con- 
vention. If,  therefore,  the  treaty  were  wholly  abrogated, 
both  powers  would,  except  in  the  vicinity  of  the  canal,  recover 
entire  freedom  of  action  in  Central  America.  The  change 
would  certainly  be  of  advantage  to  the  United  States,  and 
might  be  of  substantial  importance. 

Under  the  other  surviving  portion  of  the  treaty  (part  of 
Article  VI)  provision  is  made  for  treaties  with  the  Central 
American  States  in  furtherance  of  the  object  of  the  two 
powers  and  for  the  exercise  of  good  offices  should  differences 
arise  as  to  the  territory  through  which  the  canal  will  pass.  In 
this  case  abrogation  would,  perhaps,  signify  but  little  to  this 
country.  There  is  nothing  in  the  convention  to  prevent  Great 
Britain  from  entering  into  communication,  or  exercising  good 
offices,  with  the  Central  American  States,  should  difficulties 
hereafter  arise  between  them  and  the  United  States. 

The  other  two  amendments  present  more  formidable  dif- 
ficulties. 

The  first  of  them,  which  reserves  to  the  United  States  the 
i  Printed  in  italics. 


150  Negotiations  of  Treaty 

right  of  taking  any  measures  which  it  may  find  necessary  to 
secure  by  its  own  forces  the  defense  of  the  United  States,  ap- 
pears to  His  Majesty's  Government  to  involve  a  distinct  de- 
parture from  the  principle  which  has  until  now  found  ac- 
ceptance with  both  Governments — the  principle,  namely,  that 
in  time  of  war  as  well  as  in  time  of  peace  the  passage  of  the 
canal  is  to  remain  free  and  unimpeded,  and  is  to  be  so  main- 
tained by  the  power  or  powers  responsible  for  its  control. 

Were  this  amendment  added  to  the  convention  the  United 
States  would,  it  is  presumed,  be  within  their  rights,  if  at  any 
moment  when  it  seemed  to  them  that  their  safety  required  it, 
in  view  of  warlike  preparations  not  yet  commenced,  but  con- 
templated or  supposed  to  be  contemplated  by  another  power, 
they  resorted  to  warlike  acts  in  or  near  the  canal — acts  clearly 
inconsistent  with  the  neutral  character  which  it  has  always 
been  sought  to  give  it,  and  which  would  deny  the  free  use 
of  it  to  the  commerce  and  navies  of  the  world. 

It  appears  from  the  report  of  the  Senate  committee  that 
the  proposed  addition  to  Article  II  was  adopted  from  Article 
X  of  the  Suez  Canal  Convention,  which  runs  as  follows: 

Similarly,  the  provisions  of  Articles  IV,  V,  VII,  and  VIII,i  shall 
not  interfere  with  the  measures  which  His  Majesty  the  Sultan  and 
His  Highness  the  Khedive,  in  the  name  of  His  Imperial  Majesty, 
and  within  the  limits  of  the  firmans  granted,  might  find  it  neces- 
sary to  take  for  securing  by  their  own  forces  the  defense  of  Egypt 
and  the  maintenance  of  public  order. 

In  case  His  Imperial  Majesty  the  Sultan,  or  His  Highness  the 
Khedive,  should  find  it  necessary  to  avail  themselves  of  the  ex- 
ceptions for  which  this  article  provides,  the  signatory  powers  of 

i  Article  IV  guarantees  that  the  Maritime  Canal  shall  remain 
open  in  time  of  war  as  a  free  passage  even  to  the  ships  of  war 
of  belligerents,  and  regulates  the  revictualing,  transit,  and  deten- 
tion of  such  vessels  in  the  canal. 

Article  V  regulates  the  embarkation  and  disembarkation  of 
troops,  munitions  or  materials  of  war  by  belligerent  powers  in 
time  of  war. 

Article  VII  prohibits  the  powers  from  keeping  any  vessel  of  war 
in  the  waters  of  the  canal. 

Article  VIII  imposes  on  the  agents  of  the  signatory  powers  in 
Egypt  the  duty  of  watching  over  the  execution  of  the  treaty,  and 
taking  measures  to  secure  the  free  passage  of  the  canal. 


Negotiations  of  Treaty  151 

the  declaration  of  London  shall  be  notified  thereof  by  the  Imperial 
Ottoman  Government. 

It  is  likewise  understood  that  the  provisions  of  the  four  articles 
aforesaid  shall  in  no  case  occasion  any  obstacle  to  the  measures 
which  the  Imperial  Ottoman  Government  may  think  it  necessary 
to  take  in  order  to  insure  by  its  own  forces  the  defense  of  its 
other  possessions  situated  on  the  eastern  coast  of  the  Red  Sea. 

It  is,  I  understand,  contended  in  support  of  the  Senate 
amendment  that  the  existence  of  the  above  provisions  in  the 
Suez  Canal  Convention  justifies  the  demand  now  made  for  the 
insertion  of  analogous  provisions  in  regard  to  the  proposed 
Nicaragua  Canal. 

But  the  analogy  which  it  has  been  attempted  to  set  up  fails 
in  one  essential  particular.  The  banks  of  the  Suez  Canal  are 
within  the  dominions  of  a  territorial  sovereign,  who  was  a 
party  to  the  convention,  and  whose  established  interests  it  was 
necessary  to  protect,  whereas  the  Nicaragua  Canal  will  be 
constructed  in  territory  belonging  not  to  the  United  States, 
but  to  Central  American  States,  of  whose  sovereign  rights 
other  powers  can  not  claim  to  dispose. 

Moreover,  it  seems  to  have  escaped  attention  that  Article  X 
of  the  Suez  Canal  Convention  receives  most  important  modi- 
fication from  Article  XI,  which  lays  down  that  "the  measures 
which  shall  be  taken  in  the  cases  provided  for  by  Articles  IX 
and  X  of  the  present  treaty  shall  not  interfere  with  the  free 
use  of  the  canal."  The  article  proceeds  to  say  that  "in  the 
same  cases,  the  erection  of  permanent  fortifications  contrary 
to  the  provisions  of  Article  VIII  is  prohibited." 

The  last  paragraph  of  Article  VIII,  which  is  specially  al- 
luded to,  runs  as  follows: 

They  [i.  e.,  the  agents  of  the  signatory  powers  in  Egypt]  shall 
especially  demand  the  suppression  of  any  work  or  the  dispersion  of 
any  assemblage  on  either  bank  of  the  canal,  the  object  or  effect 
of  which  might  be  to  interfere  with  the  liberty  and  the  entire 
security  of  the  navigation. 

The  situation  which  would  be  created  by  the  addition  of  the 
new  clause  is  deserving  of  serious  attention.  If  it  were  to  be 
added,  the  obligation  to  respect  the  neutrality  of  the  canal  in 


152  Negotiations  of  Treaty 

all  circumstances  would,  so  far  as  Great  Britain  is  concerned, 
remain  in  force;  the  obligation  of  the  United  States,  on  the 
other  hand,  would  be  essentially  modified.  The  result  would 
be  a  one-sided  arrangement  under  which  Great  Britain  would 
be  debarred  from  any  warlike  action  in  or  around  the  canal, 
while  the  United  States  would  be  able  to  resort  to  such  action 
to  whatever  extent  they  might  deem  necessary  to  secure  their 
own  safety. 

It  may  be  contended  that  if  the  new  clause  were  adopted, 
section  7  of  Article  II,  which  prohibits  the  erection  of  forti- 
fications, would  sufficiently  insure  the  free  use  of  the  canal. 
This  contention  is,  however,  one  which  His  Majesty's  Govern- 
ment are  quite  unable  to  admit.  I  will  not  insist  upon  the 
dangerous  vagueness  of  the  language  employed  in  the  amend- 
ment, or  upon  the  absence  of  all  security  as  to  the  manner  in 
which  the  words  might,  at  some  future  time,  be  interpreted. 
For  even  if  it  were  more  precisely  worded,  it  would  be  im- 
possible to  determine  what  might  be  the  effect  if  one  clause 
permitting  defensive  measures,  and  another  forbidding  for- 
tifications, were  allowed  to  stand  side  by  side  in  the  conven- 
tion. To  His  Majesty's  Government  it  seems,  as  I  have  al- 
ready said,  that  the  amendment  might  be  construed  as  leav- 
ing it  open  to  the  United  States  at  any  moment,  not  only  if 
war  existed,  but  even  if  it  were  anticipated,  to  take  any  meas- 
ures, however  stringent  or  far-reaching,  which,  in  their  own 
judgment,  might  be  represented  as  suitable  for  the  purpose  of 
protecting  their  national  interests.  Such  an  enactment  would 
strike  at  the  very  root  of  that  "general  principle"  of  neutral- 
ization upon  which  the  Clayton-Bulwer  Treaty  was  based,  and 
which  was  reaffirmed  in  the  convention  as  drafted. 

But  the  import  of  the  amendment  stands  out  in  stronger 
relief  when  the  third  proposal  is  considered.  This  strikes  out 
Article  III  of  the  convention,  under  which  the  high  con- 
tracting parties  engaged,  immediately  upon  the  convention  be- 
ing ratified,  to  bring  it  to  the  notice  of  other  powers  and  to  in- 
vite their  adherence.    If  that  adherence  were  given,  the.neu- 


Negotiations  of  Treaty  153 

trality  of  the  canal  would  be  secured  by  the  whole  of  the  ad- 
hering powers.  Without  that  adherence  it  would  depend  only 
upon  the  guarantee  of  the  two  contracting  powers.  The 
amendment,  however,  not  only  removes  all  prospect  of  the 
wider  guarantee,  but  places  this  country  in  a  position  of 
marked  disadvantage,  compared  with  other  powers  which 
would  not  be  subject  to  the  self-denying  ordinance  which 
Great  Britain  is  desired  to  accept.  It  would  follow,  were 
His  Majesty's  Government  to  agree  to  such  an  arrangement, 
that  while  the  United  States  would  have  a  treaty  right  to  in- 
terfere with  the  canal  in  time  of  war,  or  apprehended  war,  and 
while  other  powers  could  with  a  clear  conscience  disregard  any 
of  the  restrictions  imposed  by  the  convention,  Great  Britain 
alone,  in  spite  of  her  enormous  possessions  on  the  American 
continent,  in  spite  of  the  extent  of  her  Australasian  colonies 
and  her  interests  in  the  East,  would  be  absolutely  precluded 
from  resorting  to  any  such  action,  or  from  taking  measures  to 
secure  her  interests  in  and  near  the  canal. 

I  request  that  your  excellency  will  explain  to  the  Secretary 
of  State  the  reasons,  as  set  forth  in  this  dispatch,  why  His 
Majesty's  Government  feel  unable  to  accept  the  convention 
in  the  shape  presented  to  them  by  the  American  ambassador, 
and  why  they  prefer,  as  matters  stand  at  present,  to  retain 
unmodified  the  provisions  of  the  Clayton-Bulwer  Treaty. 
His  Majesty's  Government  have,  throughout  these  negotia- 
tions, given  evidence  of  their  earnest  desire  to  meet  the  views 
of  the  United  States.  They  would  on  this  occasion  have  been 
ready  to  consider  in  a  friendly  spirit  any  amendments  of  the 
convention,  not  inconsistent  with  the  principles  accepted  by 
both  Governments,  which  the  Government  of  the  United 
States  might  have  desired  to  propose,  and  they  would  sin- 
cerely regret  a  failure  to  come  to  an  amicable  understand- 
ing in  regard  to  this  important  subject. 

Your  lordship  is  authorized  to  read  this  dispatch  to  the  Sec- 
retary of  State  and  to  leave  a  copy  in  his  hands. 

I  am,  etc.,  Lansdowne. 


154  Negotiations  of  Treaty 

[Inclosure  in  No.  2.] 
Articles  I  and  VI  of  convention  between  Her  Majesty  and  the 
United  States  of  America  relative  to  the  establishment  of  a 
communication  by  ship  canal  between  the  Atlantic  and  Pa- 
cific Oceans,  signed  at  Washington,  April  19,  1850: 

ARTICLE  I 

The  Governments  of  Great  Britain  and  the  United  States 
hereby  declare  that  neither  the  one  nor  the  other  will  ever  ob- 
tain or  maintain  for  itself  any  exclusive  control  over  the  said 
ship  canal;  agreeing  that  neither  will  ever  erect  or  main- 
tain any  fortifications  commanding  the  same,  or  in  the  vicin- 
ity thereof,  or  occupy,  or  fortify,  or  colonize,  or  assume  or 
exercise  any  dominion  over  Nicaragua,  Costa  Rica,  the  Mos- 
quito Coast,  or  any  part  of  Central  America;  nor  will  either 
make  use  of  any  protection  which  either  affords,  or  may  af- 
ford, or  any  alliance  which  either  has,  or  may  have,  to  or 
with  any  State  or  people,  for  the  purpose  of  erecting  or  main- 
taining any  such  fortifications,  or  of  occupying,  fortifying,  or 
colonizing  Nicaragua,  Costa  Rica,  the  Mosquito  Coast,  or  any 
part  of  Central  America,  or  of  assuming  or  exercising  domin- 
ion over  the  same.  Nor  will  Great  Britain  or  the  United 
States  take  advantage  of  any  intimacy,  or  use  any  alliance, 
connection,  or  influence  that  either  may  possess  with  any  State 
or  Government  through  whose  territory  the  said  canal  may 
pass  for  the  purpose  of  acquiring  or  holding,  directly  or  in- 
directly, for  the  subjects  or  citizens  of  the  one,  any  rights  or 
advantages  in  regard  to  commerce  or  navigation  through  the 
said  canal,  which  shall  not  be  offered,  on  the  same  terms,  to 
the  subjects  or  citizens  of  the  other. 

ARTICLE  VI 

The  contracting  parties  in  this  convention  engage  to  invite 
every  State  with  which  both  or  either  have  friendly  inter- 
course to  enter  into  stipulations  with  them  similar  to  those 
which  they  have  entered  into  with  each  other  to  the  end  that 


Negotiations  of  Treaty  155 

all  other  States  may  share  in  the  honor  and  advantage  of  hav- 
ing contributed  to  a  work  of  such  general  interest  and  im- 
portance as  the  canal  herein  contemplated;  and  the  contracting 
parties  likewise  agree  that  each  shall  enter  into  treaty  stipu- 
lations, with  such  of  the  Central  American  States  as  they  may 
deem  advisable,  for  the  purpose  of  more  effectually  carrying 
out  the  great  design  of  this  convention,  namely,  that  of  con- 
structing and  maintaining  the  said  canal  as  a  ship  communi- 
cation between  the  two  oceans  for  the  benefit  of  mankind,  on 
equal  terms  to  all,  and  of  protecting  the  same;  and  they  also 
agree  that  the  good  offices  of  either  shall  be  employed,  when 
requested  by  the  other,  in  aiding  and  assisting  the  negotiation 
of  such  treaty  stipulations;  and  should  any  differences  arise  as 
to  right  or  property  over  the  territory  through  which  the 
said  canal  shall  pass  between  the  States  or  Governments  of 
Central  America,  and  such  differences  should  in  any  way  im- 
pede or  obstruct  the  execution  of  the  said  canal,  the  Govern- 
ments of  Great  Britain  and  the  United  States  will  use  their 
good  offices  to  settle  such  differences  in  the  manner  best  suited 
to  promote  the  interests  of  the  said  canal,  and  to  strengthen 
the  bonds  of  friendship  and  alliance  ivhich  exist  between  the 
contracting  parties. 


Correspondence  Respecting  the  Treaty  Signed  at  Wash- 
ington November  18,  1901,  Relative  to  the  Establish- 
ment of  a  Communication  by  Ship  Canal  between  the 
Atlantic  and  Pacific  Oceans. 

[Printed  in  British  Blue  Book.     "United  States,  1902,  No.  1."] 

No.  1. 
Lord  Pauncefote  to  the  Marquis  of  Lansdowne. 

Washington,  April  25,  1901. 
My  Lord  :  Since  the  rejection  by  His  Majesty's  Government 
of  the  amendments  introduced  by  the  Senate  in  the  Inter- 
oceanic  Canal  Convention  of  the  5th  of  February,  1900,  Mr. 
Hay  has  been  engaged  in  framing  a  new  draft,  which,  as  I 


156  Negotiations  of  Treaty 

understand,  he  has  drawn  up  after  consultation  with  promi- 
nent Senators,  and  which  he  trusts  will  be  acceptable  to  His 
Majesty's  Government. 

Mr.  Hay  has  handed  me  a  copy  of  the  draft,  which  I  have 
the  honor  to  forward  herewith  for  your  lordship's  considera- 
tion. 

S  have,  etc.,  Pauncefote. 


[Inclosure  in  No.  1.] 

Draft  of  convention  relative  to  the  construction  of  an  inter- 
oceanic  canal. 

The  United  States  of  America  and  His  Majesty  the  King 
of  the  United  Kingdom  of  Great  Britain  and  Ireland,  Em- 
peror of  India,  being  desirous  to  facilitate  the  construction 
of  a  ship  canal  to  connect  the  Atlantic  and  Pacific  Oceans, 
and  to  that  end  to  remove  any  objection  which  may  arise  out 
of  the  convention  of  the  19th  April,  1850,  commonly  called  the 
Clayton-Bulwer  Treaty,  to  the  construction  of  such  canal  un- 
der the  auspices  of  the  Government  of  the  United  States, 
without  impairing  the  "general  principle"  of  neutralization 
established  in  Article  VIII  of  that  convention,  have  for  that 
purpose  appointed  as  their  plenipotentiaries: 

The  President  of  the  United  States,  John  Hay,  Secretary 
of  State  of  the  United  States  of  America; 

And  His  Majesty  the  King  of  Great  Britain  and  Ireland, 
Emperor  of  India,  the  Right  Honorable  Lord  Pauncefote, 
G.  C.  B.,  G.  C.  M.  G.,  His  Majesty's  ambassador  extraor- 
dinary and  plenipotentiary  to  the  United  States; 

Who,  having  communicated  to  each  other  their  full  powers, 
which  were  found  to  be  in  due  and  proper  form,  have  agreed 
upon  the  following  articles: 

ARTICLE  T 

The  high  contracting  parties  agree  that  the  present  con- 
vention shall  supersede  the  aforementioned  convention  of  the 
19th  April,  1850. 


Negotiations  of  Treaty  157 

ARTICLE   II 

It  is  agreed  that  the  canal  may  be  constructed  under  the 
auspices  of  the  Government  of  the  United  States,  either  di- 
rectly at  its  own  cost,  or  by  gift  or  loan  of  money  to  individ- 
uals or  corporations,  or  through  subscription  to  or  purchase 
of  stock  or  shares,  and  that,  subject  to  the  provisions  of  the 
present  convention,  the  said  Government  shall  have  and  enjoy 
all  the  rights  incident  to  such  construction,  as  well  as  the 
exclusive  right  of  providing  for  the  regulation  and  manage- 
ment of  the  canal. 

ARTICLE   III 

The  United  States  adopts,  as  the  basis  of  the  neutralization 
of  said  ship  canal,  the  following  rules,  substantially  as  em- 
bodied in  the  convention  of  Constantinople,  signed  the  28th 
October,  1888,  for  the  free  navigation  of  the  Suez  Canal ;  that 
is  to  say: 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  com- 
merce and  of  war  of  all  nations,  on  terms  of  entire  equality, 
so  that  there  shall  be  no  discrimination  against  any  nation,  or 
its  citizens  or  subjects,  in  respect  of  the  conditions  or  charges 
of  traffic,  or  otherwise. 

2.  The  canal  shall  never  be  blockaded,  nor  shall  any  right  of 
war  be  exercised  nor  any  act  of  hostility  be  committed  within 
it.  The  United  States,  however,  shall  be  at  liberty  to  main- 
tain such  military  police  along  the  canal  as  may  be  necessary 
to  protect  it  against  lawlessness  and  disorder. 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual  nor 
take  any  stores  in  the  canal  except  so  far  as  may  be  strictly 
necessary;  and  the  transit  of  such  vessels  through  the  canal 
shall  be  effected  with  the  least  possible  delay  in  accordance 
with  the  regulations  in  force,  and  with  only  such  intermission 
as  may  result  from  the  necessities  of  the  service. 

Prizes  shall  be  in  all  respects  subject  to  the  same  rules  as 
vessels  of  war  of  the  belligerents. 

4.  No  belligerent  shall  embark  or  disembark  troops,  muni- 


158  Negotiations  of  Treaty 

tions  of  war,  or  warlike  materials  in  the  canal  except  in  case 
of  accidental  hinderance  of  the  transit,  and  in  such  case  the 
transit  shall  be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  article  shall  apply  to  waters  adja- 
cent to  the  canal  within  3  marine  miles  of  either  end.  Vessels 
of  war  of  a  belligerent  shall  not  remain  in  such  waters  longer 
than  twenty- four  hours  at  any  one  time  except  in  case  of  dis- 
tress, and  in  such  case  shall  depart  as  soon  as  possible;  but  a 
vessel  of  war  of  one  belligerent  shall  not  depart  within  twenty- 
four  hours  from  the  departure  of  a  vessel  of  war  of  the  other 
belligerent. 

6.  The  plant,  establishments,  buildings,  and  all  works  neces- 
sary to  the  construction,  maintenance,  and  operation  of  the 
canal  shall  be  deemed  to  be  part  thereof,  for  the  purpose  of 
this  convention,  and  in  time  of  war  as  in  time  of  peace  shall 
enjoy  complete  immunity  from  attack  or  injury  by  belligerents 
and  from  acts  calculated  to  impair  their  usefulness  as  part 
of  the  canal. 

ARTICLE   IV 

The  present  convention  shall  be  ratified  by  the  President  of 
the  United  States,  by  and  with  the  advice  and  consent  of  the 
Senate  thereof,  and  by  His  Britannic  Majesty;  and  the  rati- 
fications shall  be  exchanged  at  Washington  or  at  London  at 

the  earliest  possible  time  within  months  from  the  date 

hereof. 

In  faith  whereof  the  respective  plenipotentiaries  have  signed 
this  convention,  and  thereunto  affixed  their  seals. 

Done,  in  duplicate,  at  Washington  the day  of ,  in 

the  year  of  our  Lord  one  thousand  nine  hundred  and  one. 


No.  2. 

The  Marquis  of  Lansdowne  to  Mr.  Lowther. 

Foreign  Office,  August  3,  1901. 
Sir:  The  draft  convention  dealing  with  the  question  of  the 


Negotiations  of  Treaty  159 

interoceanic  canal,  forwarded  in  Lord  Pauncefote's  dispatch 
of  the  25th  April,  has  been  most  carefully  examined. 

I  inclose,  for  your  information,  the  accompanying  copy  of  a 
memorandum  explaining  the  views  of  His  Majesty's  Govern- 
ment, which  I  have  authorized  Lord  Pauncefote,  should  he 
think  proper,  to  communicate  to  Mr.  Hay. 

His  Majesty's  Government  have  approached  the  considera- 
tion of  this  important  question  with  a  sincere  desire  to  facili- 
tate the  progress  of  the  great  enterprise  in  which  both  Govern- 
ments take  such  interest.  They  feel  confident  that  the  United 
States  Government  will  give  them  credit  for  the  friendly  spirit 
in  which  Mr.  Hay's  proposals  have  been  examined  and  that 
they  will  recognize  that  if  it  has  been  deemed  necessary  to 
suggest  amendments  at  one  or  two  points  it  has  been  because 
they  are  considered  requisite  for  the  purpose  of  bringing 
about  the  conclusion  of  a  treaty  which  shall  be  accepted  as 
equitable  and  satisfactory  by  the  public  of  both  countries. 
I  am,  etc.,  Lansdowne. 


[Inclosure  1  in  No.  2.] 
[Memorandum.] 

In  the  dispatch  which  I  addressed  to  Lord  Pauncefote  on 
the  22d  February  last,  and  which  was  communicated  to  Mr. 
Hay  on  the  11th  March,  I  explained  the  reasons  for  which  His 
Majesty's  Government  were  unable  to  accept  the  amendments 
introduced  by  the  Senate  of  the  United  States  into  the  con- 
vention, signed  at  Washington  in  February,  1900,  relative  to 
the  construction  of  an  interoceanic  canal. 

The  amendments  were  three  in  number,  namely: 

1.  The  insertion  in  Article  II,  after  the  reference  to  Article 
VIII  of  the  Clayton-Bulwer  convention,  of  the  words  "which  con- 
vention is  hereby  superseded." 

2.  The  addition  of  a  new  paragraph  after  section  5  of  Article  II 
in  the  following  terms : 

"It  is  agreed,  however,  that  none  of  the  immediately  foregoing 
conditions  and  stipulations  in  sections  numbered  1,  2,  3,  4,  and  5 
of  this  article  shall  apply  to  measures  which  the  United  States 
may  find  it  necessary  to  take  for  securing  by  its  own  forces  the 


160  Negotiations  of  Treaty 

defense  of  the  United  States  and  the  maintenance  of  public  order." 
3.  The  excision  of  Article  III,  which  provides  that  "the  high 
contracting  parties  will,  immediately  upon  the  exchange  of  the 
ratifications  of  this  convention,  bring  it  to  the  notice  of  the  other 
powers  and  invite  them  to  adhere  to  it." 

2.  The  objections  entertained  by  His  Majesty's  Government 
may  be  briefly  stated  as  follows: 

(1)  The  Clayton-Bulwer  convention  being  an  international 
compact  of  unquestionable  validity  could  not  be  abrogated  or 
modified  save  with  the  consent  of  both  parties  to  the  contract. 
No  attempt  had,  however,  been  made  to  ascertain  the  views  of 
Her  Late  Majesty's  Government.  The  convention  dealt  with 
several  matters  for  which  no  provision  had  been  made  in  the 
convention  of  February,  1900,  and  if  the  former  were  wholly 
abrogated  both  powers  would,  except  in  the  vicinity  of  the 
canal,  recover  entire  freedom  of  action  in  Central  America,  a 
change  which  might  be  of  substantial  importance. 

(2)  The  reservation  to  the  United  States  of  the  right  to  take 
any  measures  which  it  might  find  necessary  to  secure  by  its 
own  forces  the  defense  of  the  United  States  appeared  to  His 
Majesty's  Government  to  involve  a  distinct  departure  from  the 
principle  of  neutralization  which  until  then  had  found  accept- 
ance with  both  Governments,  and  which  both  were,  under  the 
convention  of  1900,  bound  to  uphold.  Moreover,  if  the 
amendment  were  added,  the  obligation  to  respect  the  neutrality 
of  the  canal  in  all  circumstances  would,  so  far  as  Great 
Britain  was  concerned,  remain  in  force;  the  obligation  of  the 
United  States,  on  the  other  hand,  would  be  essentially  modified. 
The  result  would  be  a  one-sided  arrangement,  under  which 
Great  Britain  would  be  debarred  from  any  warlike  action  in 
or  around  the  canal,  while  the  United  States  would  be  able  to 
resort  to  such  action  even  in  time  of  peace  to  whatever  extent 
they  might  deem  necessary  to  secure  their  own  safety. 

(3)  The  omission  of  the  article  inviting  the  adherence  of 
other  powers  placed  this  country  in  a  position  of  marked  dis- 
advantage compared  with  other  powers;  while  the  United 
States  would  have  a  treaty  right  to  interfere  with  the  canal  in 


Negotiations  of  Treaty  161 

time  of  war,  or  apprehended  war,  and  while  other  powers 
could  with  a  clear  conscience  disregard  any  of  the  restrictions 
imposed  by  the  convention  of  1900,  Great  Britain  alone  would 
be  absolutely  precluded  from  resorting  to  any  such  action  or 
from  taking  measures  to  secure  her  interests  in  and  near  the 
canal. 

For  these  reasons  His  Majesty's  Government  preferred,  as 
matters  stood,  to  retain  unmodified  the  provisions  of  the  Clay- 
ton-Bulwer  convention.  They  had,  however,  throughout  the 
negotiations  given  evidence  of  their  earnest  desire  to  meet  the 
views  of  the  United  States,  and  would  sincerely  regret  a  fail- 
ure to  come  to  an  amicable  understanding  in  regard  to  this 
important  subject. 

3.  Mr.  Hay,  rightly  apprehending  that  His  Majesty's  Gov- 
ernment did  not  intend  to  preclude  all  further  attempt  at 
negotiation,  has  endeavored  to  find  means  by  which  to  reconcile 
such  divergences  of  view  as  exist  between  the  two  Govern- 
ments, and  has  communicated  a  further  draft  of  a  treaty 
for  the  consideration  of  His  Majesty's  Government. 

Following  the  order  of  the  Senate  amendments,  the  conven- 
tion now  proposed — 

(1)  Provides  by  a  separate  article  that  the  Clayton-Bul- 
wer  Convention  shall  be  superseded. 

(2)  The  paragraph  inserted  by  the  Senate  after  section  5 
of  Article  II  is  omitted. 

(3)  The  article  inviting  other  powers  to  adhere  is  omitted. 
There  are  three  other  points  to  which  attention   must  be 

directed : 

(a)  The  words  "in  time  of  war  as  in  time  of  peace"  are 
omitted  in  rule  1. 

(b)  The  draft  contains  no  stipulation  against  the  acquisi- 
tion of  sovereignty  over  the  Isthmus  or  over  the  strip  of  ter- 
ritory through  which  the  canal  is  intended  to  pass.  There 
was  no  stipulation  of  this  kind  in  the  Hay-Pauncefote  con- 
vention; but,  by  the  surviving  portion  of  Article  I  of  the 
Clayton-Bulwer  convention,  the  two  Governments  agreed  that 


162  Negotiations  of  Treaty 

neither  would  ever  "occupy,  or  fortify,  or  colonize,  or  assume, 
or  exercise  any  dominion  over  Nicaragua,  Costa  Rica,  the 
Mosquito  coast,  or  any  part  of  Central  America,"  nor  attain 
any  of  the  foregoing  objects  by  protection  offered  to,  or  al- 
liance with,  any  State  or  people  of  Central  America. 

(c)  While  the  amendment  reserving  to  the  United  States 
the  right  of  providing  for  the  defense  of  the  canal  is  no  longer 
pressed  for,  the  first  portion  of  rule  7,  providing  that  "no 
fortifications  shall  be  erected  commanding  the  canal  or  the 
waters  adjacent,"  has  been  omitted.  The  latter  portion  of  the 
rule  has  been  incorporated  in  rule  2  of  the  new  draft,  and 
makes  provision  for  military  police  to  protect  the  canal  against 
lawlessness  and  disorder. 

4.  I  fully  recognize  the  friendly  spirit  which  has  prompted 
Mr.  Hay  in  making  further  proposals  for  the  settlement  of 
the  question,  and  while  in  no  way  abandoning  the  position 
which  His  Majesty's  Government  assumed  in  rejecting  the 
Senate  amendments,  or  admitting  that  the  dispatch  of  the  22d 
February  was  other  than  a  well-founded,  moderate,  and  rea- 
sonable statement  of  the  British  case,  I  have  examined  the 
draft  treaty  with  every  wish  to  arrive  at  a  conclusion  which 
shall  facilitate  the  construction  of  an  interoceanic  canal  by  the 
United  States  without  involving  on  the  part  of  His  Majesty's 
Government  any  departure  from  the  principles  for  which  they 
have  throughout  contended. 

5.  In  form  the  new  draft  differs  from  the  convention  of 
1900,  under  which  the  high  contracting  parties,  after  agree- 
ing that  the  canal  might  be  constructed  by  the  United  States, 
undertook  to  adopt  certain  rules  as  the  basis  upon  which  the 
canal  was  to  be  neutralized.  In  the  new  draft  the  United 
States  intimate  their  readiness  "to  adopt"  somewhat  similar 
rules  as  the  basis  of  the  neutralization  of  the  canal.  It  would 
appear  to  follow  that  the  whole  responsibility  for  upholding 
these  rules,  and  thereby  maintaining  the  neutrality  of  the 
canal,  would  henceforward  be  assumed  by  the  Government 
of  the  United  States.     The  change  of  form  is  an  important 


Negotiations  of  Treaty  163 

one;  but  in  view  of  the  fact  that  the  whole  cost  of  the  con- 
struction of  the  canal  is  to  be  borne  by  that  Government, 
which  is  also  to  be  charged  with  such  measures  as  may  be  nec- 
essary to  protect  it  against  lawlessness  and  disorder,  His  Maj- 
esty's Government  are  not  likely  to  object  to  it. 

6.  The  proposal  to  abrogate  the  Clayton-Bulwer  convention 
is  not,  I  think,  inadmissible  if  it  can  be  shown  that  sufficient 
provision  is  made  in  the  new  treaty  for  such  portions  of  the 
convention  as  ought,  in  the  interests  of  this  country,  to  re- 
main in  force.  This  aspect  of  the  case  must  be  considered 
in  connection  with  the  provisions  of  Article  I  of  the  Clayton- 
Bulwer  convention  which  have  already  been  quoted,  and  Arti- 
cle VIII  referred  to  in  the  preamble  of  the  new  treaty. 

Thus,  in  view  of  the  permanent  character  of  the  treaty  to 
be  concluded  and  of  the  "general  principle"  reaffirmed 
thereby  as  a  perpetual  obligation,  the  high  contracting  par- 
ties should  agree  that  no  change  of  sovereignty  or  other 
change  of  circumstances  in  the  territory  through  which  the 
canal  is  intended  to  pass  shall  affect  such  "general  principle" 
or  release  the  high  contracting  parties,  or  either  of  them, 
from  their  obligations  under  the  treaty,  and  that  the  rules 
adopted  as  the  basis  of  neutralization  shall  govern,  so  far  as 
possible,  all  interoceanic  communications  across  the  isthmus. 

I  would  therefore  propose  an  additional  article  in  the  fol- 
lowing terms,  on  the  acceptance  of  which  His  Majesty's  Gov- 
ernment would  probably  be  prepared  to  withdraw  their  ob- 
jections to  the  formal  abrogation  of  the  Clayton-Bulwer  con- 
vention : 

In  view  of  the  permanent  character  of  this  treaty,  whereby  the 
general  principle  established  by  Article  VIII  of  the  Clayton-Bulwer 
convention  is  reaffirmed,  the  high  contracting  parties  hereby  de- 
clare and  agree  that  the  rules  laid  down  in  the  last  preceding  ar- 
ticle shall,  so  far  as  they  may  be  applicable,  govern  all  inter- 
oceanic communications  across  the  isthmus  which  connects  North 
and  South  America,  and  that  no  change  of  territorial  sovereignty, 
or  other  change  of  circumstances,  shall  affect  such  general  principle 
or  the  obligations  of  the  high  contracting  parties  under  the  present 
treaty 


164  Negotiations  of  Treaty 

7.  The  various  points  connected  with  the  defense  of  the 
canal  may  conveniently  be  considered  together.  In  the  pres- 
ent draft  the  Senate  amendment  has  been  dropped,  which  left 
the  United  States  at  liberty  to  apply  such  measures  as  might 
be  found  "necessary  to  take  for  securing  by  its  own  forces 
the  defense  of  the  United  States."  On  the  other  hand,  the 
words  "in  time  of  war  as  in  time  of  peace"  are  omitted  from 
rule  1,  and  there  is  no  stipulation,  as  originally  in  rule  7,  pro- 
hibiting the  erection  of  fortifications  commanding  the  canal 
or  the  waters  adjacent. 

I  do  not  fail  to  observe  the  important  difference  between 
the  question  as  now  presented  to  us  and  the  position  which 
was  created  by  the  amendment  adopted  in  the  Senate. 

In  my  dispatch  I  pointed  out  the  dangerous  ambiguity  of 
an  instrument  of  which  one  clause  permitted  the  adoption 
of  defensive  measures,  while  another  prohibited  the  erection  of 
fortifications.  It  is  most  important  that  no  doubt  should 
exist  as  to  the  intention  of  the  contracting  parties.  As  to 
this,  I  understand  that  by  the  omission  of  all  reference  to 
the  matter  of  defense  the  United  States  Government  desire 
to  reserve  the  power  of  taking  measures  to  protect  the  canal, 
at  any  time  when  the  United  States  may  be  at  war,  from 
destruction  or  damage  at  the  hands  of  an  enemy  or  enemies. 
On  the  other  hand,  I  conclude  that,  with  the  above  exception, 
there  is  no  intention  to  derogate  from  the  principles  of  neu- 
trality laid  down  by  the  rules.  As  to  the  first  of  these  propo- 
sitions I  am  not  prepared  to  deny  that  contingencies  may 
arise  when,  not  only  from  a  national  point  of  view,  but  on 
behalf  of  the  commercial  interests  of  the  whole  world,  it 
might  be  of  supreme  importance  to  the  United  States  that 
they  should  be  free  to  adopt  measures  for  the  defense  of  the 
canal  at  a  moment  when  they  were  themselves  engaged  in  hos- 
tilities. 

It  is  also  to  be  borne  in  mind  that,  owing  to  the  omission 
of  the  words  under  which  this  country  became  jointly  bound 
to  defend  the  neutrality  of  the  canal,  and  the  abrogation  of 


Negotiations  of  Treaty  165 

the  Clayton-Bulwer  treaty,  the  obligations  of  Great  Britain 
would  be  materially  diminished. 

This  is  a  most  important  consideration.  In  my  dispatch 
of  the  22d  February  I  dwelt  upon  the  strong  objection  en- 
tertained by  His  Majesty's  Government  to  any  agreement 
under  which,  while  the  United  States  would  have  a  treaty 
right  to  interfere  with  the  canal  in  time  of  war,  or  appre- 
hended war,  Great  Britain  alone,  in  spite  of  her  vast  pos- 
sessions on  the  American  continent  and  the  extent  of  her 
interests  in  the  East,  would  be  absolutely  precluded  from  re- 
sorting to  any  such  action,  or  from  taking  measures  to  secure 
her  interests  in  and  near  the  canal.  The  same  exception 
could  not  be  taken  to  an  arrangement  under  which,  supposing 
that  the  United  States,  as  the  power  owning  the  canal  and  re- 
sponsible for  the  maintenance  of  its  neutrality,  should  find 
it  necessary  to  interfere  temporarily  with  its  free  use  by  the 
shipping  of  another  power,  that  power  would  thereupon  at 
once  and  ipso  facto  become  liberated  from  the  necessity  of 
observing  the  rules  laid  down  in  the  new  treaty. 

8.  The  difficulty  raised  by  the  absence  of  any  provision 
for  the  adherence  of  other  powers  still  remains.  While  in- 
different as  to  the  form  in  which  the  point  is  met,  I  must 
emphatically  renew  the  objections  of  His  Majesty's  Govern- 
ment to  being  bound  by  stringent  rules  of  neutral  conduct 
not  equally  binding  upon  other  powers.  I  would  therefore 
suggest  the  insertion  in  rule  1,  after  "all  nations,"  of  the 
words  "which  shall  agree  to  observe  these  rules."  This  addi- 
tion will  impose  upon  other  powers  the  same  self-denying 
ordinance  as  Great  Britain  is  desired  to  accept,  and  will  fur- 
nish an  additional  security  for  the  neutrality  of  the  ca- 
nal, which  it  will  be  the  duty  of  the  United  States  to  main- 
tain. 

As  matters  of  minor  importance,  I  suggest  the  renewal  of 
one  of  the  stipulations  of  Article  VIII  of  the  Clayton-Bulwer 
convention  by  adding  to  rule  1  the  words  "such  conditions 
and  charges  shall  be  just  and  equitable,"  and  the  adoption  of 


166  Negotiations  of  Treaty 

"treaty"  in  lieu  of  "convention"  to  designate  the  international 
agreement  which  the  high  contracting  parties  may  conclude. 

Mr.  Hay's  draft,  with  the  proposed  amendments  shown  in 
italics,  is  annexed. 

Lansdowne. 

August  3,  1901. 


[Inclosure  2  in  No.  2.] 

Draft  of  treaty  relative  to  the  construction  of  an  interoceanic 

canal. 

The  United  States  of  America  and  His  Majesty,  the  King 
of  the  United  Kingdom  of  Great  Britain  and  Ireland,  etc., 
being  desirous  to  facilitate  the  construction  of  a  ship  canal 
to  connect  the  Atlantic  and  Pacific  Oceans,  and  to  that  end 
to  remove  any  objection  which  may  arise  out  of  the  conven- 
tion of  the  19th  April,  1850,  commonly  called  the  Clayton- 
Bulwer  treaty,  to  the  construction  of  such  canal  under  the 
auspices  of  the  Government  of  the  United  States,  without 
impairing  the  "general  principle"  of  neutralization  estab- 
lished in  Article  VIII  of  that  convention,  have  for  that  pur- 
pose appointed  as  their  plenipotentiaries: 

The  President  of  the  United  States,  John  Hay,  Secretary 
of  State  of  the  United  States  of  America; 

And  His  Majesty  the  King  of  Great  Britain  and  Ireland, 
etc.,  the  Right  Honorable  Lord  Pauncefote,  G.  C.  B.,  G.  C.  M. 
G.,  His  Majesty's  ambassador  extraordinary  and  plenipoten- 
tiary to  the  United  States; 

Who,  having  communicated  to  each  other  their  full  pow- 
ers, which  were  found  to  be  in  due  and  proper  form,  have 
agreed  upon  the  following  articles: 

ARTICLE   I 

The  high  contracting  parties  agree  that  the  present  treaty 
shall  supersede  the  aforementioned  convention  of  the  19th 
April,  1850. 


*  Negotiations  of  Treaty  167 

ARTICLE   II 

It  is  agreed  that  the  canal  may  be  constructed  under  the 
auspices  of  the  Government  of  the  United  States,  either  di- 
rectly at  its  own  cost,  or  by  gift  or  loan  of  money  to  indi- 
viduals or  corporations,  or  through  subscription  to  or  pur- 
chase of  stock  or  shares,  and  that,  subject  to  the  provisions 
of  the  present  treaty,  the  said  Government  shall  have  and 
enjoy  all  the  rights  incident  to  such  construction,  as  well  as 
the  exclusive  right  of  providing  for  the  regulation  and  man- 
agement of  the  canal. 

ARTICLE  III 

The  United  States  adopts,  as  the  basis  of  the  neutralization 
of  said  ship  canal,  the  following  rules,  substantially  as  em- 
bodied in  the  convention  of  Constantinople,  signed  the  28th 
October,  1888,  for  the  free  navigation  of  the  Suez  Canal, 
that  is  to  say: 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  com- 
merce and  of  war  of  all  nations  which  shall  agree  to  observe 
these  rules,  on  terms  of  entire  equality,  so  that  there  shall 
be  no  discrimination  against  any  nation  so  agreeing,  or  its 
citizens  or  subjects,  in  respect  of  the  conditions  or  charges 
of  traffic,  or  otherwise.  Such  conditions  and  charges  of 
traffic  shall  be  just  and  equitable. 

2.  The  canal  shall  never  be  blockaded,  nor  shall  any  right 
of  war  be  exercised  nor  any  act  of  hostility  be  committed 
within  it.  The  United  States,  however,  shall  be  at  liberty  to 
maintain  such  military  police  along  the  canal  as  may  be 
necessary  to  protect  it  against  lawlessness  and  disorder. 

3.  Vessels  of  war  of  a  belligerent  shall  not  revictual  nor 
take  any  stores  in  the  canal  except  so  far  as  may  be  strictly 
necessary;  and  the  transit  of  such  vessels  through  the  canal 
shall  be  effected  with  the  least  possible  delay  in  accordance 
with  the  regulations  in  force,  and  with  only  such  intermis- 
sion as  may  result  from  the  necessities  of  the  sendee. 


168  Negotiations  of  Treaty 

Prizes  shall  be  in  all  respects  subject  to  the  same  rules  as 
vessels  of  war  of  the  belligerents. 

4.  No  belligerent  shall  embark  or  disembark  troops,  muni- 
tions of  war,  or  warlike  materials  in  the  canal  except  in  case 
of  accidental  hinderance  of  the  transit,  and  in  such  case  the 
transit  shall  be  resumed  with  all  possible  dispatch. 

5.  The  provisions  of  this  article  shall  apply  to  waters  ad- 
jacent to  the  canal  within  3  marine  miles  of  either  end.  Ves- 
sels of  war  of  a  belligerent  shall  not  remain  in  such  waters 
longer  than  twenty-four  hours  at  any  one  time  except  in  case 
of  distress,  and  in  such  case  shall  depart  as  soon  as  possible; 
but  a  vessel  of  war  of  one  belligerent  shall  not  depart  within 
twenty-four  hours  from  the  departure  of  a  vessel  of  war  of 
the  other  belligerent. 

6.  The  plant,  establishments,  buildings,  and  all  works  nec- 
essary to  the  construction,  maintenance,  and  operation  of  the 
canal  shall  be  deemed  to  be  part  thereof  for  the  purposes  of 
this  treaty,  and  in  time  of  war,  as  in  time  of  peace,  shall 
enjoy  complete  immunity  from  attack  or  injury  by  belliger- 
ents and  from  acts  calculated  to  impair  their  usefulness  as 
part  of  the  canal. 

ARTICLE  III-A 

In  view  of  the  permanent  character  of  this  treaty  whereby 
the  general  principle  established  by  Article  VIII  of  the  Clay- 
ton-Bulwer  convention  is  reaffirmed,  the  high  contracting  par- 
ties hereby  declare  and  agree  that  the  rules  laid  down  in  the 
last  preceding  article  shall,  so  far  as  they  may  be  applicable, 
govern  all  interoceanic  communications  across  the  isthmus 
which  connects  North  and  South  America,  and  that  no  change 
of  territorial  sovereignty,  or  other  change  of  circumstances, 
shall  affect  such  general  principle  or  the  obligations  of  the 
high  contracting  parties  under  the  present  treaty. 

ARTICLE   IV 

The  present  treaty  shall  be  ratified  by  the  President  of  the 
United   States,  by  and  with  the  advice  and  consent  of  the 


Negotiations  of  Treaty  169 

Senate  thereof,  and  by  His  Britannic  Majesty;  and  the  rati- 
fications shall  be  exchanged  at  Washington  or  at  London  at 

the  earliest  possible  time  within months  from  the  date 

hereof. 

In  faith  whereof  the  respective  plenipotentiaries  have 
signed  this  treaty,  and  thereunto  affixed  their  seals. 

Done  in  duplicate  at  Washington,  the day  of  , 

in  the  year  of  our  Lord  one  thousand  nine  hundred  and  one. 


No.  3. 
The  Marquis  of  Lansdowne  to  Mr.  Lowther. 

Foreign  Office,  September  12,  1901. 

Sir:  I  have  to  inform  you  that  I  have  learned  from  Lord 
Pauncefote  that  Mr.  Hay  has  laid  before  the  President  the 
memorandum,  a  copy  of  which  was  forwarded  to  you  in  my 
dispatch  of  the  3d  August. 

Mr.  McKinley  regarded,  as  did  Mr.  Hay,  the  consideration 
shown  to  the  last  proposals  of  the  United  States  Government 
relative  to  the  interoceanic  canal  treaty  as  in  the  highest  de- 
gree friendly  and  reasonable. 

With  regard  to  the  changes  suggested  by  His  Majesty's 
Government,  Mr.  Hay  was  apprehensive  that  the  first  amend- 
ment proposed  to  clause  1  of  Article  III  would  meet  with  op- 
position because  of  the  strong  objection  entertained  to  invit- 
ing other  powers  to  become  contract  parties  to  a  treaty  af- 
fecting the  canal.  If  His  Majesty's  Government  found  it 
not  convenient  to  accept  the  draft  as  it  stood,  they  might 
perhaps  consider  favorably  the  substitution  for  the  words 
"the  canal  shall  be  free  and  open  to  the  vessels  of  commerce 
and  of  war  of  all  nations  which  shall  agree  to  observe  these 
rules"  the  words  "the  canal  shall  be  free  and  open  to  the 
vessels  of  commerce  and  of  war  of  all  nations  observing  these 
rules,"  and  instead  of  "any  nation  so  agreeing"  the  words 
"any  such  nation."  This,  it  seemed  to  Mr.  Hay,  would  ac- 
complish the  purpose  aimed  at  by  His  Majesty's  Govern- 
ment. 


170  Negotiations  of  Treaty 

The  second  amendment  in  the  same  clause,  providing  that 
conditions  and  charges  of  traffic  shall  be  just  and  equitable, 
was  accepted  by  the  President. 

Coming  to  article  numbered  III-A,  which  might  be  called 
Article  IV,  Mr.  Hay  pointed  out  that  the  preamble  of  the 
draft  treaty  retained  the  declaration  that  the  general  prin- 
ciple of  neutralization  established  in  Article  VIII  of  the 
Clayton-Bulwer  convention  was  not  impaired.  To  reiterate 
this  in  still  stronger  language  in  a  separate  article,  and  to 
give  to  Article  VIII  of  the  Clayton-Bulwer  convention  what 
seemed  a  wider  application  than  it  originally  had,  would, 
Mr.  Hay  feared,  not  meet  with  acceptance. 

If,  however,  it  seemed  indispensable  to  His  Majesty's  Gov- 
ernment that  an  article  providing  for  the  contingency  of  a 
change  in  sovereignty  should  be  inserted,  he  thought  it  might 
state  that: 

It  is  agreed  that  no  change  of  territorial  sovereignty  or  of  the 
international  relations  of  the  country  traversed  by  the  beforemen- 
tioned  canal  shall  affect  the  general  principle  of  neutralization  or 
the  obligation  of  the  high  contracting  parties  under  the  present 
treaty. 

This  would  cover  the  point  in  a  brief  and  simple  way. 

In  conclusion,  Mr.  Hay  expressed  his  appreciation  of  the 
friendly  and  magnanimous  spirit  shown  by  His  Majesty's 
Government  in  the  treatment  of  this  matter,  and  his  hope  that 
a  solution  would  be  attained  which  would  enable  the  United 
States'  Government  to  start  at  once  upon  the  great  enter- 
prise which  so  vitally  concerned  the  whole  world,  and  espe- 
cially Great  Britain,  as  the  first  of  commercial  nations. 

I  am,  etc.,  Lansdowne. 


No.  4. 
The  Marquis  of  Lansdowne  to  Lord  Pauncefote. 

Foreign  Office,  October  23,  1901. 
My  Lord:  I  informed  the  United  States  charge  d'affaires 
to-day  that  His  Majesty's  Government  had  given  their  careful 


Negotiations  of  Treaty  171 

attention  to  the  various  amendments  which  had  been  sug- 
gested in  the  draft  interoceanic  canal  treaty,  communicated 
by  Mr.  Hay  to  your  lordship  on  the  25th  April  last,  and  that 
I  was  now  in  a  position  to  inform  him  officially  of  our  views. 

Mr.  Hay  had  suggested  that  in  Article  III,  rule  1,  we 
should  substitute  for  the  words  "the  canal  shall  be  free  and 
open  to  the  vessels  of  commerce  and  of  war  of  all  nations 
which  shall  agree  to  observe  these  rules,"  etc.,  the  words  "the 
canal  shall  be  free  and  open  to  the  vessels  of  commerce  and 
of  war  of  all  nations  observing  these  rules,"  and  in  the  same 
clause,  as  a  consequential  amendment,  to  substitute  for  the 
words  "any  nation  so  agreeing"  the  words  "any  such  nation." 
His  Majesty's  Government  were  prepared  to  accept  this 
amendment,  which  seemed  to  us  equally  efficacious  for  the 
purpose  which  we  had  in  view,  namely,  that  of  insuring  that 
Great  Britain  should  not  be  placed  in  a  less  advantageous  po- 
sition than  other  powers,  which  they  stopped  short  of  con- 
ferring upon  other  nations  a  contractual  right  to  the  use  of 
the  canal. 

We  were  also  prepared  to  accept,  in  lieu  of  Article  III-A, 
the  new  Article  IV  proposed  by  Mr.  Hay,  which,  with  the  ad- 
dition of  the  words  "or  countries"  proposed  in  the  course  of 
the  discussions  here,  runs  as  follows: 

It  is  agreed  that  no  change  of  territorial  sovereignty  or  of  the 
international  relations  of  the  country  or  countries  traversed  by  the 
before-mentioned  canal  shall  affect  the  general  principle  of  neu- 
tralization or  the  obligation  of  the  high  contracting  parties  under 
the  present  treaty. 

I  admitted  that  there  was  some  force  in  the  contention  of 
Mr.  Hay,  which  had  been  strongly  supported  in  conversation 
with  me  by  Mr.  Choate,  that  Article  III-A,  as  drafted  by  His 
Majesty's  Government,  gave  to  Article  VIII  of  the  Clayton- 
Bulwer   treaty   a   wider   application   than    it   originally   pos- 


In  addition  to  those  amendments,  we  proposed  to  add  in 
the  preamble,  after  the  words  "being  desirous  to  facilitate 


172  Negotiations  of  Treaty 

the  construction  of  a  ship  canal  to  connect  the  Atlantic  and 
Pacific  Oceans,"  the  words  "by  whatever  route  may  be  consid- 
ered expedient,"  and  "such  ship  canal"  for  "said  ship  canal" 
in  the  first  paragraph  of  Article  III,  words  which,  in  our 
opinion,  seemed  to  us  desirable  for  the  purpose  of  removing 
any  doubt  which  might  possibly  exist  as  to  the  application 
of  the  treaty  to  any  other  interoceanic  canals  as  well  as  that 
through  Nicaragua. 

I  handed  to  Mr.  White  a  statement  showing  the  draft  as  it 
originally  stood  and  the  amendments  proposed  on  each  side. 
I  am,  etc., 

Lansdowne. 


No.  5. 

Lord  Pauncefote   to   the  Marquis   of  Lansdowne. 

Washington,  November  18,  1901. 
My  Lord:  I  have  the  honor  to  transmit  to  your  lordship 
herewith  a  copy  of  a  communication  from  Mr.  Hay,  dated 
the  8th  November,  formally  placing  on  record  the  President's 
approval  of  the  various  amendments  made  in  the  draft  of 
the  new  interoceanic  canal  treaty  in  the  course  of  the  negoti- 
ations, and  particularly  set  forth  in  your  lordship's  dispatch 
to  me  of  the  23d  October. 

I  have,  etc.  Pauncefote. 


[Inclosure  in  No.  5.] 
Mr.  Hay  to  Lord  Pauncefote. 

Washington,  November  8,  1901. 
Excellency:  Upon  your  return  to  Washington,  I  had  the 
honor  to  receive  from  you  a  copy  of  the  instruction  addressed 
to  you  on  the  23d  October  last  by  the  Marquis  of  Lansdowne, 
accepting  and  reducing  to  final  shape  the  various  amendments 
in  the  draft  of  an  interoceanic  canal  treaty,  as  developed  in 
the  course  of  the  negotiations  lately  conducted  in  London, 
through  Mr.  Choate,  with  yourself  and  Lord  Lansdowne. 


First  British  Protest  173 

The  treaty,  being  thus  brought  into  a  form  representing  a 
complete  agreement  on  the  part  of  the  negotiators,  has  been 
submitted  to  the  President,  who  approves  of  the  conclusions 
reached,  and  directs  me  to  proceed  to  the  formal  signature 
thereof. 

I  have,  accordingly,  the  pleasure  to  send  you  a  clear  copy 
of  the  text  of  the  treaty,  embodying  the  several  modifications 
agreed  upon.  Upon  being  advised  by  you  that  this  text  cor- 
rectly represents  your  understanding  of  the  agreement  thus 
happily  brought  about,  the  treaty  will  be  engrossed  for  sig- 
nature at  such  time  as  may  be  most  convenient  to  you. 

I  have,  etc.  John  Hay. 


No.  6. 
Lord  Pauncefote  to  the  Marquis  of  Lansdowne. 

Washington,  November  19,  1901. 
My  Lord  :  I  have  the  honor  to  report  that,  by  appoint- 
ment with  Mr.  Hay,  I  yesterday  went  to  the  State  Depart- 
ment,  accompanied  by   Mr.   Wyndhani,   and   signed   the  new 
treaty  for  the  construction  of  an  interoceanic  canal. 

I  have,  etc.  Pauncefote. 


No.  7. 

[Telegraphic] 

Lord  Pauncefote  to  the  Marquis  of  Lansdowne. 

Washington,  December  16,  1901. 
Canal  treaty  ratified  by  72  votes  to  6  in  Senate  to-day. 


FIRST  BRITISH  PROTEST 

Charge  dy  Affaires  Innes  to  the  Secretary  of  State. 

British  Embassy 
Kineo,  Maine. 
July  8,  1912. 
Sir:  The  attention  of  His  Majesty's  Government  has  been 


174  First  British  Protest 

called  to  the  various  proposals  that  have  from  time  to  time 
been  made  for  the  purpose  of  relieving  American  ship- 
ping from  the  burden  of  the  tolls  to  be  levied  on  ves- 
sels passing  through  the  Panama  Canal,  and  these  pro- 
posals together  with  the  arguments  that  have  been  used  to 
support  them  have  been  carefully  considered  with  a  view  to 
the  bearing  on  them  of  the  provisions  of  the  treaty  between 
the  United  States  and  Great  Britain  of  November  18th  1901. 
The  proposals  may  be  summed  up  as  follows: — 

1.  To  exempt  all  American  shipping  from  the  tolls, 

2.  To  refund  to  all  American  ships  the  tolls  which  they 
may  have  paid, 

3.  To  exempt  American  ships  engaged  in  the  coastwise 
trade, 

4.  To  repay  the  tolls  to  American  ships  engaged  in  the 
coastwise  trade. 

The  proposal  to  exempt  all  American  shipping  from  the 
payment  of  the  tolls,  would,  in  the  opinion  of  His  Majesty's 
Government,  involve  an  infraction  of  the  treaty,  nor  is  there, 
in  their  opinion,  any  difference  in  principle  between  charging 
tolls  only  to  refund  them  and  remitting  tolls  altogether.  The 
result  is  the  same  in  either  case,  and  the  adoption  of  the  al- 
ternative method  of  refunding  the  tolls  in  preference  to  that 
of  remitting  them,  while  perhaps  complying  with  the  letter 
of  the  treaty,  would  still  contravene  its  spirit. 

It  has  been  argued  that  a  refund  of  the  tolls  would  merely 
be  equivalent  to  a  subsidy  and  that  there  is  nothing  in  the 
Hay-Pauncefote  treaty  which  limits  the  right  of  the  United 
States  to  subsidize  its  shipping.  It  is  true  that  there  is  noth- 
ing in  that  treaty  to  prevent  the  United  States  from  subsidiz- 
ing its  shipping  and  if  it  granted  a  subsidy  His  Majesty's 
Government  could  not  be  in  a  position  to  complain.  But 
there  is  a  great  distinction  between  a  general  subsidy,  either 
to  shipping  at  large  or  to  shipping  engaged  in  any  given 
trade,  and  a  subsidy  calculated  particularly  with  reference  to 
the  amount  of  user  of  the  Canal  by  the  subsidized  lines  or 


Second  British  Protest  175 

vessels.  If  such  a  subsidy  were  granted  it  would  not,  in  the 
opinion  of  His  Majesty's  Government,  be  in  accordance  with 
the  obligations  of  the  Treaty. 

As  to  the  proposal  that  exemption  shall  be  given  to  vessels 
engaged  in  the  coastwise  trade,  a  more  difficult  question  arises. 
If  the  trade  should  be  so  regulated  as  to  make  it  certain  that 
only  bona-fide  coastwise  traffic  which  is  reserved  for  United 
States  vessels  would  be  benefited  by  this  exemption,  it  may  be 
that  no  objection  could  be  taken.  But  it  appears  to  my  gov- 
ernment that  it  would  be  impossible  to  frame  regulations 
which  would  prevent  the  exemption  from  resulting,  in  fact, 
in  a  preference  to  United  States  shipping  and  consequently 
in  an  infraction  of  the  Treaty. 
I  have  the  honor  to  be, 

With  the  highest  consideration, 
Sir, 
Your  most  obedient,  humble  Servant, 

A.  Mitchell  Innes. 


SECOND  BRITISH  PROTEST 

The  Secretary  of  State  for  Foreign  Affairs  of  Great  Britain 
to  Ambassador  Bryce. 

[Handed  to  the  Secretary  of  State  by  the  British  Ambassador 
December  9,  1912.] 

Foreign  Office,  November  14,  1912. 
Sir:  Your  Excellency  will  remember  that  on  the  8th  July, 
1912,  Mr.  Mitchell  Innes  communicated  to  the  Secretary  of 
State  the  objections  which  His  Majesty's  Government  enter- 
tained to  the  legislation  relating  to  the  Panama  Canal,  which 
was  then  under  discussion  in  Congress,  and  that  on  the  27th 
August,  after  the  passing  of  the  Panama  Canal  Act  and  the 
issue  of  the  President's  memorandum  on  signing  it,  he  in- 
formed Mr.  Knox  that  when  His  Majesty's  Government  had 
had  time  to  consider  fully  the  Act  and  the  memorandum  a 
further  communication  would  be  made  to  him. 


176  Second  British  Protest 

Since  that  date  the  text  of  the  Act  and  the  memorandum 
of  the  President  have  received  attentive  consideration  at  the 
hands  of  His  Majesty's  Government.  A  careful  study  of  the 
President's  memorandum  has  convinced  me  that  he  has  not 
fully  appreciated  the  British  point  of  view,  and  has  misun- 
derstood Mr.  Mitchell  Innes'  note  of  the  8th  July.  The  Pres- 
ident argues  upon  the  assumption  that  it  is  the  intention  of 
His  Majesty's  Government  to  place  upon  the  Hay-Pauncefote 
treaty  an  interpretation  which  would  prevent  the  United 
States  from  granting  subsidies  to  their  own  shipping  passing 
through  the  Canal,  and  which  would  place  them  at  a  disad- 
vantage as  compared  with  other  nations.  This  is  not  the 
case;  His  Majesty's  Government  regard  equality  of  all  na- 
tions as  the  fundamental  principle  underlying  the  treaty  of 
1901  in  the  same  way  that  it  was  the  basis  of  the  Suez  Canal 
Convention  of  1888,  and  they  do  not  seek  to  deprive  the  United 
States  of  any  liberty  which  is  open  either  to  themselves  or  to 
any  other  nation ;  nor  do  they  find  either  in  the  letter  or  in  the 
spirit  of  the  Hay-Pauncefote  treaty  any  surrender  by  either 
of  the  contracting  Powers  of  the  right  to  encourage  its  ship- 
ping or  its  commerce  by  such  subsidies  as  it  may  deem  expedi- 
ent. 

The  terms  of  the  President's  memorandum  render  it  essen- 
tial that  I  should  explain  in  some  detail  the  view  which  His 
Majesty's  Government  take  as  to  what  is  the  proper  interpre- 
tation of  the  treaty,  so  as  to  indicate  the  limitations  which 
they  consider  it  imposes  upon  the  freedom  of  action  of  the 
United  States,  and  the  points  in  which  the  Panama  Canal  Act, 
as  enacted,  infringes  what  His  Majesty's  Government  hold  to 
be  their  treaty  rights. 

The  Hay-Pauncefote  Treaty  does  not  stand  alone;  it  was 
the  corollary  of  the  Clayton-Bulwer  Treaty  of  1850.  The 
earlier  treaty  was,  no  doubt,  superseded  by  it,  but  its  general 
principle,  as  embodied  in  article  8,  was  not  to  be  impaired. 
The  object  of  the  later  treaty  is  clearly  shown  by  its  pream- 
ble; it  was  "to  facilitate  the  construction  of  a  ship  canal  to 


Second  British  Protest  177 

connect  the  Atlantic  and  Pacific  oceans  by  whatever  route 
may  be  deemed  expedient,  and  to  that  end  to  remove  any  ob- 
jection which  may  arise  out  of  the  Clayton-Bulwer  Treaty  to 
the  construction  of  such  canal  under  the  auspices  of  the  Gov- 
ernment of  the  United  States,  without  impairing  the  general 
principle  of  neutralization  established  in  article  8  of  that 
convention."  It  was  upon  that  footing,  and  upon  that  foot- 
ing alone,  that  the  Clayton-Bulwer  Treaty  was  superseded. 

Under  that  treaty  both  parties  had  agreed  not  to  obtain  any 
exclusive  control  over  the  contemplated  ship  canal,  but  the 
importance  of  the  great  project  was  fully  recognized,  and 
therefore  the  construction  of  the  canal  by  others  was  to  be 
encouraged,  and  the  canal  when  completed  was  to  enjoy  a 
special  measure  of  protection  on  the  part  of  both  the  con- 
tracting parties. 

Under  article  8  the  two  Powers  declared  their  desire,  in 
entering  into  the  Convention,  not  only  to  accomplish  a  par- 
ticular object,  but  also  to  establish  a  general  principle,  and 
therefore  agreed  to  extend  their  protection  to  any  practicable 
trans-isthmian  communication,  either  by  canal  or  railway, 
and  either  at  Tehuantepec  or  Panama,  provided  that  those 
who  constructed  it  should  impose  no  other  charges  or  condi- 
tions of  traffic  than  the  two  Governments  should  consider  just 
and  equitable,  and  that  the  canal  or  railway,  "being  open  to 
the  subjects  and  citizens  of  Great  Britain  and  the  United 
States  on  equal  terms,  should  also  be  open  to  the  subjects  of 
any  other  State  which  was  willing  to  join  in  the  guarantee  of 
joint  protection." 

So  long  as  the  Clayton-Bulwer  Treaty  was  in  force,  there- 
fore, the  position  was  that  both  parties  to  it  had  given  up 
their  power  of  independent  action,  because  neither  was  at  lib- 
erty itself  to  construct  the  Canal  and  thereby  obtain  the  ex- 
clusive control  which  such  construction  would  confer.  It  is 
also  clear  that  if  the  Canal  had  been  constructed  while  the 
Clayton-Bulwer  Treaty  was  in  force,  it  would  have  been  open, 
in  accordance  with  article  8,  to  British  and  United   States 


178  Second  British  Protest 

ships  on  equal  terms,  and  equally  clear,  therefore,  that  the 
tolls  leviable  on  such  ships  would  have  been  identical. 

The  purpose  of  the  United  States  in  negotiating  the  Hay- 
Pauncefote  Treaty  was  to  recover  their  freedom  of  action, 
and  obtain  the  right,  which  they  had  surrendered,  to  con- 
struct the  Canal  themselves;  this  is  expressed  in  the  preamble 
to  the  treaty,  but  the  complete  liberty  of  action  consequential 
upon  such  construction  was  to  be  limited  by  the  maintenance 
of  the  general  principle  embodied  in  article  8  of  the  earlier 
treaty.  That  principle,  as  shown  above,  was  one  of  equal 
treatment  for  both  British  and  United  States  ships,  and  a 
study  of  the  language  of  article  8  shows  that  the  word  "neu- 
tralization," in  the  preamble  of  the  later  treaty,  is  not  there 
confined  to  belligerent  operations,  but  refers  to  the  system 
of  equal  rights  for  which  article  8  provides. 

If  the  wording  of  the  article  is  examined,  it  will  be  seen 
that  there  is  no  mention  of  belligerent  action  in  it  at  all. 
Joint  protection  and  equal  treatment  are  the  only  matters  al- 
luded to,  and  it  is  to  one,  or  both,  of  these  that  neutraliza- 
tion must  refer.  Such  joint  protection  has  always  been  under- 
stood by  His  Majesty's  Government  to  be  one  of  the  results 
of  the  Clayton-Bulwer  Treaty  of  which  the  United  States  was 
most  anxious  to  get  rid,  and  they  can  scarcely  therefore  be- 
lieve that  it  was  such  joint  protection  that  the  United  States 
were  willing  to  keep  alive,  and  to  which  they  referred  in  the 
preamble  of  the  Hay-Pauncefote  Treaty.  It  certainly  was 
not  the  intention  of  His  Majesty's  Government  that  any  re- 
sponsibility for  the  protection  of  the  Canal  should  attach 
to  them  in  the  future.  Neutralization  must  therefore  re- 
fer to  the  system  of  equal  rights. 

It  thus  appears  from  the  preamble  that  the  intention  of  the 
Hay-Pauncefote  Treaty  was  that  the  United  States  was  to  re- 
cover the  right  to  construct  the  trans-isthmian  canal  upon 
the  terms  that,  when  constructed,  the  canal  was  to  be  open  to 
British  and  United  States  ships  on  equal  terms. 

The  situation  created  was  in  fact  identical  with  that  re- 


Second  British  Protest  179 

suiting  from  the  Boundary  Waters  Treaty  of  1909  between 
Great  Britain  and  the  United  States,  which  provided  as  fol- 
lows : — 

"The  high  contracting  parties  agree  that  the  navigation  of  all 
navigable  boundary  waters  shall  for  ever  continue  free  and  open 
for  the  purposes  of  commerce  to  the  inhabitants  and  to  the  ships, 
vessels,  and  boats  of  both  countries  equally,  subject,  however,  to 
any  laws  and  regulations  of  either  country,  within  its  own  terri- 
tory, not  inconsistent  with  such  privilege  of  free  navigation,  and 
applying  equally  and  without  discrimination  to  the  inhabitants, 
ships,  vessels,  and  boats  of  both  countries. 

"It  is  further  agreed  that  so  long  as  this  treaty  shall  remain  in 
force  this  same  right  of  navigation  shall  extend  to  the  waters  of 
Lake  Michigan  and  to  all  canals  connecting  boundary  waters  and 
now  existing,  or  which  may  hereafter  be  constructed  on  either  side 
of  the  line.  Either  of  the  high  contracting  parties  may  adopt  rules 
and  regulations  governing  the  use  of  such  canals  within  its  own 
territory,  and  may  charge  tolls  for  the  use  thereof;  but  all  such 
rules  and  regulations  and  all  tolls  charged  shall  apply  alike  to  the 
subjects  or  citizens  of  the  high  contracting  parties,  and  they 
*     *     *     shall  be  placed  on  terms  of  equality  in  the  use  thereof." 

A  similar  provision,  though  more  restricted  in  its  scope, 
appears  in  article  27  of  the  Treaty  of  Washington,  1871,  and 
Your  Excellency  will  no  doubt  remember  how  strenuously 
the  United  States  protested,  as  a  violation  of  equal  rights, 
against  a  system  which  Canada  had  introduced  of  a  rebate  of 
a  large  portion  of  the  tolls  on  certain  freight  on  the  Welland 
Canal,  provided  that  such  freight  was  taken  as  far  as  Mont- 
real, and  how  in  the  face  of  that  protest  the  system  was 
abandoned. 

The  principle  of  equality  is  repeated  in  article  3  of  the 
Hay-Pauncefote  Treaty,  which  provides  that  the  United  States 
adopts,  as  the  basis  of  the  neutralization  of  the  Canal,  cer- 
tain rules,  substantially  as  embodied  in  the  Suez  Canal  Con- 
vention. The  first  of  these  rules  is  that  the  Canal  shall  be 
free  and  open  to  the  vessels  of  commerce  and  war  of  all  na- 
tions observing  the  rules  on  terms  of  entire  equality,  so  that 
there  shall  be  no  discrimination  against  any  such  nation. 

The  word  "neutralization"  is  no  doubt  used  in  article  3  in  the 


180  Second  British  Protest 

same  sense  as  in  the  preamble,  and  implies  subjection  to  the 
system  of  equal  rights.  The  effect  of  the  first  rule  is  there- 
fore to  establish  the  provision,  foreshadowed  by  the  preamble 
and  consequent  on  the  maintenance  of  the  principle  of  article  8 
of  the  Clayton-Bulwer  Treaty,  that  the  Canal  is  to  be  open  to 
British  and  United  States  vessels  on  terms  of  entire  equality. 
It  also  embodies  a  promise  on  the  part  of  the  United  States 
that  the  ships  of  all  nations  which  observe  the  rules  will  be 
admitted  to  similar  privileges. 

The  President  in  his  memorandum  treats  the  words  "all 
nations"  as  excluding  the  United  States.  He  argues  that,  as 
the  United  States  is  constructing  the  Canal  at  its  own  cost  on 
territory  ceded  to  it,  it  has,  unless  it  has  restricted  itself,  an 
absolute  right  of  ownership  and  control,  including  the  right  to 
allow  its  own  commerce  the  use  of  the  Canal  upon  such  terms 
as  it  sees  fit,  and  that  the  only  question  is  whether  it  has  by 
the  Hay-Pauncefote  Treaty  deprived  itself  of  the  exercise  of 
the  right  to  pass  its  own  commerce  free  or  remit  tolls  collected 
for  the  use  of  the  Canal.  He  argues  that  article  3  of  the 
treaty  is  nothing  more  than  a  declaration  of  policy  by  the 
United  States  that  the  Canal  shall  be  neutral  and  all  nations 
treated  alike  and  no  discrimination  made  against  any  one  of 
them  observing  the  rules  adopted  by  the  United  States.  "In 
other  words,  it  was  a  conditional  favored-nation  treatment, 
the  measure  of  which,  in  the  absence  of  express  stipulations  to 
that  effect,  is  not  what  the  country  gives  to  its  own  nationals, 
but  the  treatment  it  extends  to  other  nations." 

For  the  reasons  they  have  given  above  His  Majesty's  Gov- 
ernment believe  this  statement  of  the  case  to  be  wholly  at 
variance  with  the  real  position.  They  consider  that  by  the 
Clayton-Bulwer  Treaty  the  United  States  had  surrendered  the 
right  to  construct  the  Canal,  and  that  by  the  Hay-Pauncefote 
treaty  they  recovered  that  right  upon  the  footing  that  the 
Canal  should  be  open  to  British  and  United  States  vessels  upon 
terms  of  equal  treatment. 

The  case  cannot  be  put  more  clearly  than  it  was  put  by  Mr. 


Second  British  Protest  181 

Hay  himself,  who,  as  Secretary  of  State,  negotiated  the  Hay- 
Pauncefote  Treaty,  in  the  full  account  of  the  negotiations 
which  he  sent  to  the  Senate  Committee  on  Foreign  Relations 
(see  Senate  Document  No.  746,  61st  Congress,  3rd  session)  : — 

"These  rules  are  adopted  in  the  treaty  with  Great  Britain  as  a 
consideration  for  getting  rid  of  the  Clayton-Bulwer  Treaty." 

If  the  rules  set  out  in  the  Hay-Pauncefote  Treaty  secure  to 
Great  Britain  no  more  than  most-favored-nation  treatment, 
the  value  of  the  consideration  given  for  superseding  the  Clay- 
ton-Bulwer Treaty  is  not  apparent  to  His  Majesty's  Govern- 
ment. Nor  is  it  easy  to  see  in  what  way  the  principle  of 
article  8  of  the  Clayton-Bulwer  treaty,  which  provides  for 
equal  treatment  of  British  and  United  States  ships,  has 
been  maintained. 

I  notice  that  in  the  course  of  the  debate  in  the  Senate  on  the 
Panama  Canal  Bill  the  argument  was  used  by  one  of  the 
speakers  that  the  third,  fourth,  and  fifth  rules  embodied  in 
article  3  of  the  treaty  show  that  the  words  "all  nations"  can- 
not include  the  United  States,  because,  if  the  United  States 
were  at  war,  it  is  impossible  to  believe  that  it  could  be  in- 
tended to  be  debarred  by  the  treaty  from  using  its  own  terri- 
tory for  revictualing  its  war-ships  or  landing  troops. 

The  same  point  may  strike  others  who  read  nothing  but 
the  text  of  the  Hay-Pauncefote  Treaty  itself,  and  I  think  it 
is  therefore  worth  while  that  I  should  briefly  show  that  this 
argument  is  not  well  founded. 

The  Hay-Pauncefote  Treaty  of  1901  aimed  at  carrying  out 
the  principle  of  the  neutralization  of  the  Panama  Canal  by 
subjecting  it  to  the  same  regime  as  the  Suez  Canal.  Rules  3, 
4,  and  5  of  article  3  of  the  treaty  are  taken  almost  textually 
from  articles  4,  5,  and  6  of  the  Suez  Canal  Convention  of 
1888.  At  the  date  of  the  signature  of  the  Hay-Pauncefote 
Treaty  the  territory,  on  which  the  Isthmian  Canal  was  to  be 
constructed,  did  not  belong  to  the  United  States,  consequently 
there  was  no  need  to  insert  in  the  draft  treaty  provisions  cor- 


182  Second  British  Protest 

responding  to  those  in  articles  10  and  13  of  the  Suez  Canal 
Convention,  which  preserve  the  sovereign  rights  of  Turkey 
and  of  Egypt,  and  stipulate  that  articles  4  and  5  shall  not 
affect  the  right  of  Turkey,  as  the  local  sovereign,  and  of 
Egypt,  within  the  measure  of  her  autonomy,  to  take  such  meas- 
ures as  may  be  necessary  for  securing  the  defense  of  Egypt 
and  the  maintenance  of  public  order,  and,  in  the  case  of  Tur- 
key, the  defense  of  her  possessions  on  the  Ked  Sea. 

Now  that  the  United  States  has  become  the  practical  sov- 
ereign of  the  Canal,  His  Majesty's  Government  do  not  question 
its  title  to  exercise  belligerent  rights  for  its  protection. 

For  these  reasons,  His  Majesty's  Government  maintain  that 
the  words  "all  nations"  in  rule  1  of  article  3  of  the  Hay- 
Pauncefote  Treaty  include  the  United  States,  and  that,  in  con- 
sequence, British  vessels  using  the  Canal  are  entitled  to  equal 
treatment  with  those  of  the  United  States,  and  that  the  same 
tolls  are  chargeable  on  each. 

This  rule  also  provides  that  the  tolls  should  be  "just  and 
equitable."  The  purpose  of  those  words  was  to  limit  the  tolls 
to  the  amount  representing  the  fair  value  of  the  services  ren- 
dered, i.  e.,  to  the  interest  on  the  capital  expended  and  the 
cost  of  the  operation  and  maintenance  of  the  Canal.  Unless 
the  whole  volume  of  shipping  which  passes  through  the  Canal, 
and  which  all  benefits  equally  by  its  services,  is  taken  into  ac- 
count, there  are  no  means  of  determining  whether  the  tolls 
chargeable  upon  a  vessel  represent  that  vessel's  fair  propor- 
tion of  the  current  expenditure  properly  chargeable  against 
the  Canal,  that  is  to  say,  interest  on  the  capital  expended  in 
construction,  and  the  cost  of  operation  and  maintenance.  If 
any  classes  of  vessels  are  exempted  from  tolls  in  such  a  way 
that  no  receipts  from  ships  are  taken  into  account  in  the  in- 
come of  the  Canal,  there  is  no  guarantee  that  the  vessels  upon 
which  tolls  are  being  levied  are  not  being  made  to  bear  more 
than  their  fair  share  of  the  upkeep.  Apart  altogether,  there- 
fore, from  the  provision  in  rule  1  about  equality  of  treatment 
for  all  nations,  the  stipulation  that  the  tolls  shall  be  just  and 


Second  British  Protest  183 

equitable,  when  rightly  understood,  entitles  His  Majesty's 
Government  to  demand,  on  behalf  of  British  shipping,  that  all 
vessels  passing  through  the  Canal,  whatever  their  flag  or  their 
character,  shall  be  taken  into  account  in  fixing  the  amount 
of  the  tolls. 

The  result  is  that  any  system  by  which  particular  vessels 
or  classes  of  vessels  were  exempted  from  the  payment  of  tolls 
would  not  comply  with  the  stipulations  of  the  treaty  that  the 
Canal  should  be  open  on  terms  of  entire  equality,  and  that 
the  charges  should  be  just  and  equitable. 

The  President,  in  his  memorandum,  argues  that  if  there  is 
no  difference,  as  stated  in  Mr.  Mitchell  Lines'  note  of  the  8th 
July,  between  charging  tolls  only  to  refund  them  and  re- 
mitting tolls  altogether,  the  effect  is  to  prevent  the  United 
States  from  aiding  its  own  commerce  in  the  way  that  all  other 
nations  may  freely  do.  This  is  not  so.  His  Majesty's  Gov- 
ernment have  no  desire  to  place  upon  the  Hay-Pauncefote 
Treaty  an  interpretation  which  would  impose  upon  the  United 
States  any  restriction  from  which  other  nations  are  free,  or 
reserve  to  such  other  nation  any  privilege  which  is  denied 
to  the  United  States.  Equal  treatment,  as  specified  in  the 
treaty,  is  all  they  claim. 

His  Majesty's  Government  do  not  question  the  right  of  the 
United  States  to  grant  subsidies  to  United  States  shipping  gen- 
erally, or  to  any  particular  branches  of  that  shipping,  but  it 
does  not  follow  therefore  that  the  United  States  may  not  be 
debarred  by  the  Hay-Pauncefote  Treaty  from  granting  a  sub- 
sidy to  certain  shipping  in  a  particular  way,  if  the  effect  of 
the  method  chosen  for  granting  such  subsidy  would  be  to  im- 
pose upon  British  or  other  foreign  shipping  an  unfair  share  of 
the  burden  of  the  upkeep  of  the  Canal,  or  to  create  a  dis- 
crimination in  respect  of  the  conditions  or  charges  of  traffic, 
or  otherwise  to  prejudice  rights  secured  to  British  shipping 
by  this  Treaty. 

If  the  United  States  exempt  certain  classes  of  ships  from 
the  payment  of  tolls  the  result  would  be  a  form  of  subsidy  to 


184  Second  British  Protest 

those  vessels  which  His  Majesty's  Government  consider  the 
United  States  are  debarred  by  the  Hay-Pauncefote  Treaty 
from  making. 

It  remains  to  consider  whether  the  Panama  Canal  Act,  in  its 
present  form,  conflicts  with  the  treaty  rights  to  which  His 
Majesty's  Government  maintain  they  are  entitled. 

Under  section  5  of  the  Act  of  the  President  is  given,  within 
certain  defined  limits,  the  right  to  fix  the  tolls,  but  no  tolls  are 
to  be  levied  upon  ships  engaged  in  the  coastwise  trade  of  the 
United  States,  and  the  tolls,  when  based  upon  net  registered 
tonnage  for  ships  of  commerce,  are  not  to  exceed  1  dollar  25c. 
per  net  registered  ton,  nor  be  less,  other  than  for  vessels  of  the 
United  States  and  its  citizens,  than  the  estimated  propor- 
tionate cost  of  the  actual  maintenance  and  operation  of  the 
Canal.  There  is  also  an  exception  for  the  exemptions  granted 
by  article  19  of  the  Convention  with  Panama  of  1903. 

The  effect  of  these  provisions  is  that  vessels  engaged  in  the 
coastwise  trade  will  contribute  nothing  to  the  upkeep  of  the 
Canal.  Similarly  vessels  belonging  to  the  Government  of  the 
Republic  of  Panama  will,  in  pursuance  of  the  treaty  of  1903, 
contribute  nothing  to  the  upkeep  of  the  Canal.  Again,  in  the 
cases  where  tolls  are  levied,  the  tolls  in  the  case  of  ships  be- 
longing to  the  United  States  and  its  citizens  may  be  fixed  at 
a  lower  rate  than  in  the  case  of  foreign  ships,  and  may  be  less 
than  the  estimated  proportionate  cost  of  the  actual  mainte- 
nance and  operation  of  the  Canal. 

These  provisions  (1)  clearly  conflict  with  the  rule  em- 
bodied in  the  principle  established  in  article  8  of  the  Clayton- 
Bulwer  Treaty  of  equal  treatment  for  British  and  United 
States  ships,  and  (2)  would  enable  tolls  to  be  fixed  which 
would  not  be  just  and  equitable,  and  would  therefore  not  com- 
ply with  rule  1  of  article  3  of  the  Hay-Pauncefote  Treaty. 

It  has  been  argued  that  as  the  coastwise  trade  of  the  United 
States  is  confined  by  law  to  United  States  vessels,  the  exemp- 
tion of  vessels  engaged  in  it  from  the  payment  of  tolls  cannot 
injure,  the  interests  of  foreign  nations.     It  is  clear,  however, 


Second  British  Protest  185 

that  the  interests  of  foreign  nations  will  be  seriously  injured 
in  two  material  respects. 

In  the  first  place,  the  exemption  will  result  in  the  cost  of 
the  working  of  the  Canal  being  borne  wholly  by  foreign-going 
vessels,  and  on  such  vessels,  therefore,  will  fall  the  whole  bur- 
den of  raising  the  revenue  necessary  to  cover  the  cost  of  work- 
ing and  maintaining  the  Canal.  The  possibility,  therefore,  of 
fixing  the  toll  on  such  vessels  at  a  lower  figure  than  1  dol. 
25c.  per  ton,  or  of  reducing  the  rate  below  that  figure  at  some 
future  time,  will  be  considerably  lessened  by  the  exemption. 

In  the  second  place,  the  exemption  will,  in  the  opinion  of 
His  Majesty's  Government,  be  a  violation  of  the  equal  treat- 
ment secured  by  the  treaty,  as  it  will  put  the  "coastwise  trade" 
in  a  preferential  position  as  regards  other  shipping.  Coast- 
wise trade  cannot  be  circumscribed  so  completely  that  benefits 
conferred  upon  it  will  not  affect  vessels  engaged  in  the  foreign 
trade.  To  take  an  example,  if  cargo  intended  for  an  United 
States  port  beyond  the  Canal,  either  from  east  or  west,  and 
shipped  on  board  a  foreign  ship  could  be  sent  to  its  destina- 
tion ..more  cheaply,  through  the  operation  of  the  proposed 
exemption,  by  being  landed  at  an  United  States  port  before 
reaching  the  Canal,  and  then  sent  on  as  coastwise  trade,  ship- 
pers would  benefit  by  adopting  this  course  in  preference  to 
sending  the  goods  direct  to  their  destination  through  the  Canal 
on  board  the  foreign  ship. 

Again,  although  certain  privileges  are  granted  to  vessels  en- 
gaged in  an  exclusively  coastwise  trade,  His  Majesty's  Govern- 
ment are  given  to  understand  that  there  is  nothing  in  the  laws 
of  the  United  States  which  prevents  any  United  States  ship 
from  combining  foreign  commerce  with  coastwise  trade,  and 
consequently  from  entering  into  direct  competition  with  for- 
eign vessels  while  remaining  "prima  facie"  entitled  to  the  priv- 
ilege of  free  passage  through  the  Canal.  Moreover  any  re- 
striction which  may  be  deemed  to  be  now  applicable  might  at 
any  time  be  removed  by  legislation  or  even  perhaps  by  mere 
changes  in  the  regulations. 


186  Second  British  Protest 

In  these  and  in  other  ways  foreign  shipping  would  be 
seriously  handicapped,  and  any  adverse  result  would  fall 
more  severely  on  British  shipping  than  on  that  of  any  other 
nationality. 

The  volume  of  British  shipping  which  will  use  the  Canal 
will  in  all  probability  be  very  large.  Its  opening  will  shorten 
by  many  thousands  of  miles  the  waterways  between  England 
and  other  portions  of  the  British  Empire,  and  if  on  the  one 
hand  it  is  important  to  the  United  States  to  encourage  its 
mercantile  marine  and  establish  competition  between  coast- 
wise traffic  and  transcontinental  railways,  it  is  equally  im- 
portant to  Great  Britain  to  secure  to  its  shipping  that  just 
and  impartial  treatment  to  which  it  is  entitled  by  treaty,  and  in 
return  for  a  promise  of  which  it  surrendered  the  rights  which 
it  held  under  the  earlier  convention. 

There  are  other  provisions  of  the  Panama  Canal  Act  to 
which  the  attention  of  His  Majesty's  Government  has  been 
directed.  These  are  contained  in  section  11,  part  of  which 
enacts  that  a  railway  company,  subject  to  the  Inter-State 
Commerce  Act  1887,  is  prohibited  from  having  any  interlst  in 
vessels  operated  through  the  Canal  with  which  such  railways 
may  compete,  and  another  part  provides  that  a  vessel  per- 
mitted to  engage  in  the  coastwise  or  foreign  trade  of  the 
United  States  is  not  allowed  to  use  the  Canal  if  its  owner  is 
guilty  of  violating  the  Sherman  Anti-Trust  Act. 

His  Majesty's  Government  do  not  read  this  section  of  the 
Act  as  applying  to,  or  affecting,  British  ships,  and  they  there- 
fore do  not  feel  justified  in  making  any  observations  upon  it. 
They  assume  that  it  applies  only  to  vessels  flying  the  flag  of 
the  United  States,  and  that  it  is  aimed  at  practices  which  con- 
cern only  the  internal  trade  of  the  United  States.  If  this  view 
is  mistaken  and  the  provisions  are  intended  to  apply  under  any 
circumstances  to  British  ships,  they  must  reserve  their  right 
to  examine  the  matter  further  and  to  raise  such  contentions  as 
may  seem  justified. 

His  Majesty's  Government  feel  no  doubt  as  to  the  correct- 


Second  British  Protest  187 

ness  of  their  interpretation  of  the  treaties  of  1850  and  1901, 
and  as  to  the  validity  of  the  rights  they  claim  under  them 
for  British  shipping;  nor  does  there  seem  to  them  to  be  any 
room  for  doubt  that  the  provisions  of  the  Panama  Canal  Act 
as  to  tolls  conflict  with  the  rights  secured  to  their  shipping 
by  the  treaty.  But  they  recognize  that  many  persons  of  note 
in  the  United  States,  whose  opinions  are  entitled  to  great 
weight,  hold  that  the  provisions  of  the  Act  do  not  infringe  the 
conventional  obligations  by  which  the  United  States  is  bound, 
and  under  these  circumstances  they  desire  to  state  their  perfect 
readiness  to  submit  the  question  to  arbitration  if  the  Govern- 
ment of  the  United  States  would  prefer  to  take  this  course. 
A  reference  to  arbitration  would  be  rendered  unnecessary  if 
the  Government  of  the  United  States  should  be  prepared  to 
take  such  steps  as  would  remove  the  objections  to  the  Act 
which  His  Majesty's  Government  have  stated. 

Knowing  as  I  do  full  well  the  interest  which  this  great  un- 
dertaking has  aroused  in  the  New  World  and  the  emotion 
with  which  its  opening  is  looked  forward  to  by  United  States 
citizens,  I  wish  to  add  before  closing  this  dispatch  that  it  is 
only  with  great  reluctance  that  His  Majesty's  Government  have 
felt  bound  to  raise  objection  on  the  ground  of  treaty  rights  to 
the  provisions  of  the  Act.  Animated  by  an  earnest  desire  to 
avoid  points  which  might  in  any  way  prove  embarrassing  to  the 
United  States,  His  Majesty's  Government  have  confined  their 
objections  within  the  narrowest  possible  limits,  and  have  rec- 
ognized in  the  fullest  manner  the  right  of  the  United  States 
to  control  the  Canal.  They  feel  convinced  that  they  may 
look  with  confidence  to  the  Government  of  the  United  States 
to  ensure  that  in  promoting  the  interests  of  United  States 
shipping,  nothing  will  be  done  to  impair  the  safeguards  guar- 
anteed to  British  shipping  by  treaty. 

Your  Excellency  will  read  this  dispatch  to  the  Secretary  of 
State  and  will  leave  with  him  a  copy. 

I  am,  &c,  E.  Grey. 


188  Reply  to  British  Protest 

REPLY  OF  SECRETARY  OF  STATE  KNOX  TO 
THE  BRITISH  PROTEST 

It  appears  that  three  objections  are  made  to  the  provisions 
of  the  Act;  first,  that  no  tolls  are  to  be  levied  upon  ships  en- 
gaged in  the  coastwise  trade  of  the  United  States ;  second,  that 
a  discretion  appears  to  be  given  to  the  President  to  discrimi- 
nate in  fixing  tolls  in  favor  of  ships  belonging  to  the  United 
States  and  its  citizens  as  against  foreign  ships;  and  third, 
that  an  exemption  has  been  given  to  the  vessels  of  the  Republic 
of  Panama  under  Article  19  of  the  Convention  with  Panama 
of  1903. 

Considered  in  the  reverse  order  of  their  statement,  the  third 
objection,  coming  at  this  time,  is  a  great  and  complete  surprise 
to  this  Government.  The  exemption  under  that  article  ap- 
plies only  to  the  government  vessels  of  Panama,  and  was 
part  of  the  agreement  with  Panama  under  which  the  canal 
was  built.  The  Convention  containing  the  exemption  was  rati- 
fied in  1904,  and  since  then  to  the  present  time  no  claim  has 
been  made  by  Great  Britain  that  it  conflicted  with  British 
rights.  The  United  States  has  always  asserted  the  principle 
that  the  status  of  the  countries  immediately  concerned  by  rea- 
son of  their  political  relation  to  the  territory  in  which  the 
canal  was  to  be  constructed  was  different  from  that  of  all 
other  countries.  The  Hay-Herran  Treaty  with  Colombia  of 
1903  also  provided  that  the  war  vessels  of  that  country  were 
to  be  given  free  passage.  It  has  always  been  supposed  by 
this  Government  that  Great  Britain  recognized  the  propriety 
of  the  exemptions  made  in  both  of  those  treaties.  It  is  not 
believed,  therefore,  that  the  British  Government  intend  to  be 
understood  as  proposing  arbitration  upon  the  question  of 
whether  or  not  this  provision  of  the  Act,  which  in  accordance 
with  our  treaty  with  Panama  exempts  from  tolls  the  govern- 
ment vessels  of  Panama,  is  in  conflict  with  the  provisions  of 
the  Hay-Pauncefote  Treaty. 

Considering    the    second    objection    based    upon    the    dis- 


Eeply  to  British  Protest  189 

cretion  thought  to  be  conferred  upon  the  President  to  dis- 
criminate in  favor  of  ships  belonging  to  the  United  States  and 
its  citizens,  it  is  sufficient,  in  view  of  the  fact  that  the  Presi- 
dent's proclamation  fixing  the  tolls  was  silent  on  the  subject, 
to  quote  the  language  used  by  the  President  in  the  memoran- 
dum attached  to  the  Act  at  the  time  of  signature,  in  which  he 
says — 

It  is  not,  therefore,  necessary  to  discuss  the  policy  of  such  dis- 
crimination until  the  question  may  arise  in  the  exercise  of  the 
President's  discretion. 

On  this  point  no  question  has  as  yet  arisen  which,  in  the 
words  of  the  existing  arbitration  treaty  between  the  United 
States  and  Great  Britain,  "it  may  not  have  been  possible  to 
settle  by  diplomacy,"  and  until  then  any  suggestion  of  arbi- 
tration may  well  be  regarded  as  premature. 

It  is  not  believed,  however,  that  in  the  objection  now  under 
consideration  Great  Britain  intends  to  question  the  right  of 
the  United  States  to  exempt  from  the  payment  of  tolls  its  ves- 
sels of  war  and  other  vessels  engaged  in  the  service  of  this 
Government.  Great  Britain  does  not  challenge  the  right  of 
the  United  States  to  protect  the  canal.  United  States  vessels 
of  war  and  those  employed  in  government  service  are  a  part  of 
our  protective  system.  By  the  Hay-Pauncefote  Treaty  we 
assume  the  sole  responsibility  for  its  neutralization.  It  is  in- 
conceivable that  this  Government  should  be  required  to  pay 
canal  tolls  for  the  vessels  used  for  protecting  the  canal,  which 
we  alone  must  protect.  The  movement  of  United  States  ves- 
sels in  executing  governmental  policies  of  protection  are  not 
susceptible  of  explanation  or  differentiation.  The  United 
States  could  not  be  called  upon  to  explain  what  relation  the 
movement  of  a  particular  vessel  through  the  canal  has  to  its 
protection.  The  British  objection,  therefore,  is  understood 
as  having  no  relation  to  the  use  of  the  canal  by  vessels  in  the 
service  of  the  United  States  Government. 

Regarding  the  first  objection,  the  question  presented  by  Sir 


190  Reply  to  British  Protest 

Edward  Grey  arises  solely  upon  the  exemption  in  the  Canal 
Act  of  vessels  engaged  in  our  coastwise  trade. 

On  this  point  Sir  Edward  Grey  says  that  "His  Majesty's 
Government  do  not  question  the  right  of  the  United  States  to 
grant  subsidies  to  United  States  shipping  generally,  or  to  any 
particular  branches  of  that  shipping,"  and  it  is  admitted  in 
his  note  that  the  exemption  of  certain  classes  of  ships  would 
be  "a  form  of  subsidy"  to  those  vessels;  but  it  appears  from 
the  note  that  His  Majesty's  Government  would  regard  that 
form  of  subsidy  as  objectionable  under  the  treaty  if  the  effect 
of  such  subsidy  would  be  "to  impose  upon  British  or  other 
foreign  shipping  an  unfair  share  of  the  burden  of  the  up- 
keep of  the  Canal,  or  to  create  a  discrimination  in  respect  of 
the  conditions  or  charges  of  traffic,  or  otherwise  to  prejudice 
rights  secured  to  British  shipping  by  this  Treaty." 

It  is  not  contended  by  Great  Britain  that  equality  of  treat- 
ment has  any  reference  to  British  participation  in  the  coast- 
wise trade  of  the  United  States,  which,  in  accordance  with 
general  usage,  is  reserved  to  American  ships.  The  objection 
is  only  to  such  exemption  of  that  trade  from  toll  payments 
as  may  adversely  affect  British  rights  to  equal  treatment  in 
the  payment  of  tolls,  or  to  just  and  equitable  tolls.  It  will 
be  helpful  here  to  recall  that  we  are  now  only  engaged  in  con- 
sidering (quoting  from  Sir  Edward  Grey's  note)  "whether 
the  Panama  Canal  Act  in  its  present  form  conflicts  with  the 
treaty  rights  to  which  His  Majesty's  Government  maintain  they 
are  entitled,"  concerning  which  he  concludes: 

These  provisions  (1)  clearly  conflict  with  the  rule  embodied  in 
the  principle  established  in  article  8  of  the  Clayton-Bulwer  Treaty 
of  equal  treatment  for  British  and  United  States  ships,  and  (2) 
would  enable  tolls  to  be  fixed  which  would  not  be  just  and  equi- 
table, and  would  therefore  not  comply  with  rule  1  of  article  3  of  the 
Hay-Pauncefote  Treaty. 

On  the  first  of  these  points  the  objection  of  the  British 
Government  to  the  exemption  of  vessels  engaged  in  the  coast- 
wise trade  of  the  United  States  is  stated  as  follows: 


Reply  to  British  Protest  191 

*  *  *  the  exemption  will,  in  the  opinion  of  His  Majesty's 
Government,  be  a  violation  of  the  equal  treatment  secured  by  the 
treaty,  as  it  will  put  the  "coastwise  trade"  in  a  preferential  posi- 
tion as  regards  other  shipping.  Coastwise  trade  cannot  be  circum- 
scribed so  completely  that  benefits  conferred  upon  it  will  not 
affect  vessels  engaged  in  the  foreign  trade.  To  take  an  example, 
if  cargo  intended  for  an  United  States  port  beyond  the  Canal, 
either  from  east  or  west,  and  shipped  on  board  a  foreign  ship 
could  be  sent  to  its  destination  more  cheaply,  through  the  opera- 
tion of  proposed  exemption,  by  being  landed  at  an  United  States 
port  before  reaching  the  Canal,  and  then  sent  on  as  coastwise 
trade,  shippers  would  benefit  by  adopting  this  course  in  preference 
to  sending  the  goods  direct  to  their  destination  through  the  Canal 
on  board  the  foreign  ship. 

This  objection  must  be  read  in  connection  with  the  views 
expressed  by  the  British  Government  while  this  Act  was  pend- 
ing in  Congress,  which  were  stated  in  the  note  of  July  8, 
1912,  on  the  subject  from  Mr.  Innes  as  follows: 

As  to  the  proposal  that  exemption  shall  be  given  to  vessels  en- 
gaged in  the  coastwise  trade,  a  more  difficult  question  arises.  If 
the  trade  should  be  so  regulated  as  to  make  it  certain  that  only 
bona-fide  coastwise  traffic  which  is  reserved  for  United  States 
vessels  would  be  benefited  by  this  exemption,  it  may  be  that  no 
objection  could  be  taken. 

This  statement  may  fairly  be  taken  as  an  admission  that  this 
Government  may  exempt  its  vessels  engaged  in  the  coastwise 
trade  from  the  payment  of  tolls,  provided  such  exemption  be 
restricted  to  bona  fide  coastwise  traffic.  As  to  this  it  is  suf- 
ficient to  say  that  obviously  the  United  States  is  not  to  be 
denied  the  power  to  remit  tolls  to  its  own  coastwise  trade  be- 
cause of  a  suspicion  or  possibility  that  the  regulations  yet  to 
be  framed  may  not  restrict  this  exemption  to  bona  fide  coast- 
wise traffic. 

The  answer  to  this  objection,  therefore,  apart  from  any 
question  of  treaty  interpretation,  is  that  it  rests  on  conjecture 
as  to  what  may  happen  rather  than  upon  proved  facts,  and 
does  not  present  a  question  requiring  submission  to  arbitra- 
tion as  it  has  not  as  yet  passed  beyond  the  stage  where  it  can 
be  profitably  dealt  with  by  diplomatic  discussion.     It  will  be 


192  Reply  to  British  Protest 

remembered  that  only  questions  which  it  may  not  be  possible 
to  settle  by  diplomacy  are  required  by  our  arbitration  treaty 
to  be  referred  to  arbitration. 

On  this  same  point  Sir  Edward  Grey  urges  another  objec- 
tion to  the  exemption  of  coastwise  vessels  as  follows: 

Again,  although  certain  privileges  are  granted  to  vessels  engaged 
in  an  exclusively  coastwise  trade,  His  Majesty's  Government  are 
given  to  understand  that  there  is  nothing  in  the  laws  of  the 
United  States  which  prevents  any  United  States  ship  from  com- 
bining foreign  commerce  with  coastwise  trade,  and  consequently 
from  entering  into  direct  competition  with  foreign  vessels  while 
remaining  "prima  facie"  entitled  to  the  privilege  of  free  passage 
through  the  Canal.  Moreover  any  restriction  which  may  be 
deemed  to  be  now  applicable  might  at  any  time  be  removed  by 
legislation  or  even  perhaps  by  mere  changes  in  the  regulations. 

This  objection  also  raises  a  question  which,  apart  from 
treaty  interpretation,  depends  upon  future  conditions  and 
facts  not  yet  ascertained,  and  for  the  same  reasons  as  are 
above  stated  its  submission  to  arbitration  at  this  time  would 
be  premature. 

The  second  point  of  Sir  Edward  Grey's  objection  to  the  ex- 
emption of  vessels  engaged  in  coastwise  trade  remains  to  be 
considered.  On  this  point  he  says  that  the  provisions  of  the 
Act  "would  enable  tolls  to  be  fixed  which  would  not  be  just 
and  equitable,  and  would  therefore  not  comply  with  rule  1  of 
article  3  of  the  Hay-Pauncefote  Treaty." 

It  will  be  observed  that  this  statement  evidently  was 
framed  without  knowledge  of  the  fact  that  the  President's 
proclamation  fixing  the  tolls  had  issued.  It  is  not  claimed 
in  the  note  that  the  tolls  actually  fixed  are  not  "just  and 
equitable"  or  even  that  all  vessels  passing  through  the  canal 
were  not  taken  into  account  in  fixing  the  amount  of  the  tolls, 
but  only  that  either  or  both  contingencies  are  possible. 

If  the  British  contention  is  correct  that  the  true  construction 
of  the  treaty  requires  all  traffic  to  be  reckoned  in  fixing  just 
and  equitable  tolls,  it  requires  at  least  an  allegation  that  the 
tolls  as  fixed  are  not  just  and  equitable  and  that  all  traffic  has 


Eeply  to  British  Protest  193 

not  been  reckoned  in  fixing  therri  before  the  United  States  can 
be  called  upon  to  prove  that  this  course  was  not  followed, 
even  assuming  that  the  burden  of  proof  would  rest  with  the 
United  States  in  any  event,  which  is  open  to  question.  This 
Government  welcomes  the  opportunity,  however,  of  inform- 
ing the  British  Government  that  the  tolls  fixed  in  the  Presi- 
dent's proclamation  are  based  upon  the  computations  set  forth 
in  the  report  of  Professor  Emory  R.  Johnson,  a  copy  of  which 
is  forwarded  herewith  for  delivery  to  Sir  Edward  Grey,  and 
that  the  tolls  which  would  be  paid  by  American  coastwise  ves- 
sels, but  for  the  exemption  contained  in  the  Act,  were  com- 
puted in  determining  the  rate  fixed  by  the  President. 

By  reference  to  page  208  of  Professor  Johnson's  report, 
it  will  be  seen  that  the  estimated  net  tonnage  of  shipping  us- 
ing the  canal  in  1915  is  as  follows : 

Coast  to  coast  American  shipping 1,000,000  tons 

American  shipping  carrying  foreign  commerce 

of  the  United  States , 720,000  tons 

Foreign    shipping    carrying    commerce    of    the 

United  States  and  foreign  countries 8,780,000  tons 

It  was  on  this  estimate  that  tolls  fixed  in  the  President's 
proclamation  were  based. 

Sir  Edward  Grey  says,  "This  rule  [1  of  article  3  of  the 
Hay-Pauncefote  Treaty]  also  provides  that  the  tolls  should 
be  'just  and  equitable.'"  The  purpose  of  these  words,  he 
adds,  "was  to  limit  the  tolls  to  the  amount  representing  the 
fair  value  of  the  services  rendered,  i.  e.,  to  the  interest  on  the 
capital  expended  and  the  cost  of  the  operation  and  mainte- 
nance of  the  Canal."  If,  as  a  matter  of  fact,  the  tolls  now 
fixed  (of  which  he  seems  unaware)  do  not  exceed  this  require- 
ment, and  as  heretofore  pointed  out  there  is  no  claim  that  they 
do,  it  is  not  apparent  under  Sir  Edward  Grey's  contention  how 
Great  Britain  could  be  receiving  unjust  and  inequitable  treat- 
ment if  the  United  States  favors  its  coastwise  vessels  by  not 
collecting  their  share  of  the  tolls  necessary  to  meet  the  require- 
ment.    There  is  a  very  clear  distinction  between  an  omission 


194  Reply  to  British  Protest 

to  "take  into  account"  the  coastwise  tolls  in  order  to  deter- 
mine a  just  and  equitable  rate,  which  is  as  far  as  this  objection 
goes,  and  the  remission  of  such  tolls,  or  their  collection  coupled 
with  their  repayment  in  the  form  of  a  subsidy. 

The  exemption  of  the  coastwise  trade  from  tolls,  or  the  re- 
funding of  tolls  collected  from  the  coastwise  trade,  is  merely 
a  subsidy  granted  by  the  United  States  to  that  trade,  and  the 
loss  resulting  from  not  collecting,  or  from  refunding  those 
tolls,  will  fall  solely  upon  the  United  States.  In  the  same 
way  the  loss  will  fall  on  the  United  States  if  the  tolls  fixed  by 
the  President's  proclamation  on  all  vessels  represent  less  than 
the  fair  value  of  the  service  rendered,  which  must  necessarily 
be  the  case  for  many  years ;  and  the  United  States  will,  there- 
fore, be  in  the  position  of  subsidizing  or  aiding  not  merely  its 
own  coastwise  vessels,  but  foreign  vessels  as  well. 

Apart  from  the  particular  objections  above  considered,  it  is 
not  understood  that  Sir  Edward  Grey  questions  the  right  of 
the  United  States  to  subsidize  either  its  coastwise  or  its  for- 
eign shipping,  inasmuch  as  he  says  that  His  Majesty's  Gov- 
ernment do  not  find  "either  in  the  letter  or  in  the  spirit  of  the 
Hay-Pauncefote  Treaty  any  surrender  by  either  of  the  con- 
tracting Powers  of  the  right  to  encourage  its  shipping  or  its 
commerce  by  such  subsidies  as  it  may  deem  expedient." 

To  summarize  the  whole  matter :  The  British  objections  are, 
in  the  first  place,  about  the  Canal  Act  only;  but  the  Canal  Act 
does  not  fix  the  tolls.  They  ignore  the  President's  proclama- 
tion fixing  the  tolls  which  puts  at  rest  practically  all  of  the 
supposititious  injustice  and  inequality  which  Sir  Edward  Grey 
thinks  might  follow  the  administration  of  the  Act,  and  con- 
cerning which  he  expresses  so  many  and  grave  fears.  More- 
over, the  gravamen  of  the  complaint  is  not  that  the  Canal  Act 
will  actually  injure  in  its  operation  British  shipping  or  de- 
stroy rights  claimed  for  such  shipping  under  the  Hay-Paunce- 
fote Treaty,  but  that  such  injury  or  destruction  may  pos- 
sibly be  the  effect  thereof;  and  further,  and  more  particularly, 
Sir  Edward  Grey  complains  that  the  aetion  of  Congress  in 


Reply  to  British  Protest  195 

enacting  the  legislation  under  discussion  foreshadows  that 
Congress  or  the  President  may  hereafter  take  some  action 
which  might  be  injurious  to  British  shipping  and  destructive 
of  its  rights  under  the  treaty.  Concerning  this  possible  future 
injury,  it  is  only  necessary  to  say  that  in  the  absence  of  an 
allegation  of  actual  or  certainly  impending  injury,  there  ap- 
pears nothing  upon  which  to  base  a  sound  complaint.  Con- 
cerning the  infringement  of  rights  claimed  by  Giyeat  Britain,  it 
may  be  remarked  that  it  would,  of  course,  be  idle  to  contend 
that  Congress  has  not  the  power,  or  that  the  President  prop- 
erly authorized  by  Congress,  may  not  have  the  power  to  vio- 
late the  terms  of  the  Hay-Pauncefote  Treaty,  in  its  aspect  as 
a  rule  of  municipal  law.  Obviously,  however,  the  fact  that 
Congress  has  the  power  to  do  something  contrary  to  the  wel- 
fare of  British  shipping  or  that  Congress  has  put  or  may  put 
into  the  hands  of  the  President  the  power  to  do  something 
which  may  be  contrary  to  the  interests  possessed  by  British 
shipping  affords  no  just  ground  for  complaint.  It  is  the  im- 
proper exercise  of  a  power  and  not  its  possession  which  alone 
can  give  rise  to  an  international  cause  of  action;  or  to  put  it 
in  terms  of  municipal  law,  it  is  not  the  possession  of  the  power 
to  trespass  upon  another's  property  which  gives  a  right  of  ac- 
tion in  trespass,  but  only  the  actual  exercise  of  that  power  in 
committing  the  act  of  trespass  itself. 

When,  and  if,  complaint  is  made  by  Great  Britain  that  the 
effect  of  the  Act  and  the  proclamation  together  will  be  to  sub- 
ject British  vessels  as  a  matter  of  fact  to  inequality  of  treat- 
ment, or  to  unjust  and  inequitable  tolls  in  conflict  with  the 
terms  of  the  Hay-Pauncefote  Treaty,  the  question  will  then 
be  raised  as  to  whether  the  United  States  is  bound  by  that 
treaty  both  to  take  into  account  and  to  collect  tolls  from 
American  vessels,  and  also  whether  under  the  obligations  of 
that  treaty  British  vessels  are  entitled  to  equality  of  treat- 
ment in  all  respects  with  the  vessels  of  the  United  States.  Un- 
j  til  these  objections  rest  upon  something  more  substantial 
than  mere  possibility,  it  is  not  believed  that  they  should  be 


196  Reply  to  British  Protest 

submitted  to  arbitration.  The  existence  of  an  arbitration 
treaty  does  not  create  a  right  of  action;  it  merely  provides  a 
means  of  settlement  to  be  resorted  to  only  when  other  re- 
sources of  diplomacy  have  failed.  It  is  not  now  deemed  nec- 
essary, therefore,  to  enter  upon  a  discussion  of  the  views  en- 
tertained by  Congress  and  by  the  President  as  to  the  mean- 
ing of  the  Hay-Pauncefote  Treaty  in  relation  to  questions  of 
fact  which  have  not  yet  arisen,  but  may  possibly  arise  in  the 
future  in  connection  with  the  administration  of  the  Act  under 
consideration. 

It  is  recognized  by  this  Government  that  the  situation  de- 
veloped by  the  present  discussion  may  require  an  examination 
by  Great  Britain  into  the  facts  above  set  forth  as  to  the 
basis  upon  which  the  tolls  fixed  by  the  President's  proclama- 
tion have  been  computed,  and  also  into  the  regulations  and 
restrictions  circumscribing  the  coastwise  trade  of  the  United 
States,  as  well  as  into  other  facts  bearing  upon  the  situation, 
with  the  view  of  determining  whether  or  not,  as  a  matter  of 
fact,  under  present  conditions  there  is  any  ground  for  claim- 
ing that  the  Act  and  proclamation  actually  subject  British 
vessels  to  inequality  of  treatment,  or  to  unjust  and  inequitable 
tolls. 

If  it  should  be  found  as  a  result  of  such  an  examination 
on  the  part  of  Great  Britain  that  a  difference  of  opinion  ex- 
ists between  the  two  Governments  on  any  of  the  important 
questions  of  fact  involved  in  this  discussion,  then  a  situation 
will  have  arisen,  which,  in  the  opinion  of  this  Government, 
could  with  advantage  be  dealt  with  by  referring  the  contro- 
versy to  a  Commission  of  Inquiry  for  examination  and  report, 
in  the  manner  provided  for  in  the  unratified  arbitration 
treaty  of  August  3,  1911,  between  the  United  States  and 
Great  Britain. 

The  necessity  for  inquiring  into  questions  of  fact  in  their 
relation  to  controversies  under  diplomatic  discussion  was 
contemplated  by  both  Parties  in  negotiating  that  treaty,  which 
provides  for  the  institution,  as  occasion  arises,  of  a  Joint 


Memorandum  to  Act  197 

High  Commission  of  Inquiry,  to  which,  upon  the  request  of 
either  Party,  might  be  referred  for  impartial  and  conscientious 
investigation  any  controversy  between  them,  the  Commission 
being  authorized  upon  such  reference  "to  examine  into  and 
report  upon  the  particular  questions  or  matters  referred 
to  it,  for  the  purpose  of  facilitating  the  solution  of  disputes 
by  elucidating  the  facts,  and  to  define  the  issues  presented 
by  such  questions,  and  also  to  include  in  its  report  such  rec- 
ommendations and  conclusions  as  may  be  appropriate." 

This  proposal  might  be  carried  out,  should  occasion  arise 
for  adopting  it,  either  under  a  special  agreement,  or  under  the 
unratified  arbitration  treaty  above  mentioned,  if  Great  Britain 
is  prepared  to  join  in  ratifying  that  treaty,  which  the  United 
States  is  prepared  to  do. 

You  will  take  an  early  opportunity  to  read  this  dispatch 
to  Sir  Edward  Grey ;  and  if  he  should  so  desire,  you  will  leave 
a  copy  of  it  with  him. 
I  am,  Sir, 

Your  odebient  servant, 

P.  C.  Knox. 

PRESIDENT  TAFT'S  MEMORANDUM  TO  AC- 
COMPANY THE  PANAMA  CANAL  ACT 

In  signing  the  Panama  Canal  bill,  I  wish  to  leave  this 
memorandum.  The  bill  is  admirably  drawn  for  the  purpose 
of  securing  the  proper  maintenance,  operation,  and  control  of 
the  canal,  and  the  government  of  the  Canal  Zone,  and  for  the 
furnishing  to  all  the  patrons  of  the  canal,  through  the  Govern- 
ment, of  the  requisite  docking  facilities  and  the  supply  of 
coal  and  other  shipping  necessities.  It  is  absolutely  neces- 
sary to  have  the  bill  passed  at  this  session  in  order  that  the 
capital  of  the  world  engaged  in  the  preparation  of  ships  to  use 
the  canal  may  know  in  advance  the  conditions  under  which  the 
traffic  is  to  be  carried  on  through  this  waterway. 

I  wish  to  consider  the  objections  to  the  bill  in  the  order  of 
their  importance. 


198  Memorandum  to  Act 

First.  The  bill  is  objected  to  because  it  is  said  to  violate 
the  Hay-Pauncefote  Treaty  in  discriminating  in  favor  of  the 
coastwise  trade  of  the  United  States  by  providing  that  no 
tolls  shall  be  charged  to  vessels  engaged  in  that  trade  pass- 
ing through  the  canal.  This  is  the  subject  of  a  protest  by 
the  British  Government. 

The  British  protest  involves  the  right  of  the  Congress  of 
the  United  States  to  regulate  its  domestic  and  foreign  com- 
merce in  such  manner  as  to  the  Congress  may  seem  wise,  and 
specifically  the  protest  challenges  the  right  of  the  Congress 
to  exempt  American  shipping  from  the  payment  of  tolls  for 
the  use  of  the  Panama  Canal  or  to  refund  to  such  American 
ships  the  tolls  which  they  may  have  paid,  and  this  without  re- 
gard to  the  trade  in  which  such  ships  are  employed,  whether 
coastwise  or  foreign.  The  protest  states  "the  proposal  to  ex- 
empt all  American  shipping  from  the  payment  of  the  tolls 
would,  in  the  opinion  of  His  Majesty's  Government,  involve 
an  infraction  of  the  treaty  (Hay-Pauncefote),  nor  is  there,  in 
their  opinion,  any  difference  in  principle  between  charging 
tolls  only  to  refund  them  and  remitting  tolls  altogether.  The 
result  is  the  same  in  either  case  and  the  adoption  of  the  alter- 
native method  of  refunding  tolls  in  preference  of  remitting 
them,  while  perhaps  complying  with  the  letter  of  the  treaty, 
would  still  controvert  its  spirit."  The  provision  of  the  Hay- 
Pauncefote  Treaty  involved  is  contained  in  article  3,  which 
provides : 

The  United  States  adopts,  as  the  basis  of  the  neutralization  of 
such  ship  canal,  the  following  rules,  substantially  as  embodied  in 
the  convention  of  Constantinople,  signed  the  28th  October,  1888, 
for  the  free  navigation  of  the  Suez  Canal — that  is  to  say : 

1.  The  canal  shall  be  free  and  open  to  the  vessels  of  commerce 
and  of  war  of  all  nations  observing  these  rules,  on  terms  of  entire 
equality,  so  that  there  shall  be  no  discrimination  against  any  such 
nation,  or  its  citizens  or  subjects,  in  respect  of  the  conditions  or 
charges  of  traffic,  or  otherwise.  Such  conditions  and  charges  of 
traffic  shall  be  just  and  equitable. 

Then  follows  five  other  rules  to  be  observed  by  other  nations 


Memorandum  to  Act  199 

to  make  neutralization  effective,  the  observance  of  which  is  the 
condition  for  the  privilege  of  using  the  canal. 

In  view  of  the  fact  that  the  Panama  Canal  is  being  con- 
structed by  the  United  States  wholly  at  its  own  cost,  upon  ter- 
ritory ceded  to  it  by  the  Republic  of  Panama  for  that  purpose, 
and  that,  unless  it  has  restricted  itself,  the  United  States  enjoys 
absolute  rights  of  ownership  and  control,  including  the  right 
to  allow  its  own  commerce  the  use  of  the  canal  upon  such  terms 
as  it  sees  fit,  the  sole  question  is,  Has  the  United  States,  in  the 
language  above  quoted  from  the  Hay-Pauncefote  Treaty,  de- 
prived itself  of  the  exercise  of  the  right  to  pass  its  own  com- 
merce free  or  to  remit  tolls  collected  for  the  use  of  the  Ca- 
nal? 

It  will  be  observed  that  the  rules  specified  in  article  3  of  the 
treaty  were  adopted  by  the  United  States  for  a  specific  pur- 
pose, namely,  as  the  basis  of  the  neutralization  of  the  canal, 
and  for  no  other  purpose.  The  article  is  a  declaration  of 
policy  by  the  United  States  that  the  canal  shall  be  neutral; 
that  the  attitude  of  this  Government  toward  the  commerce  of 
the  world  is  that  all  nations  will  be  treated  alike  and  no  dis- 
crimination made  by  the  United  States  against  any  one  of  them 
observing  the  rules  adopted  by  the  United  States.  The  right 
to  the  use  of  the  canal  and  to  equality  of  treatment  in  the  use 
depends  upon  the  observance  of  the  conditions  of  the  use  by 
the  nations  to  whom  we  extended  that  privilege.  The  priv- 
ileges of  all  nations  to  whom  we  extended  the  use  upon  the 
observance  of  these  conditions  were  to  be  equal  to  that  ex- 
tended to  any  one  of  them  which  observed  the  conditions.  In 
other  words,  it  was  a  conditional  favored-nation  treatment, 
the  measure  of  which,  in  the  absence  of  express  stipulation 
to  that  effect,  is  not  what  the  country  gives  to  its  own  nation- 
als, but  the  treatment  it  extends  to  other  nations. 

Thus  it  is  seen  that  the  rules  are  but  a  basis  of  neutraliza- 
tion, intended  to  effect  the  neutrality  which  the  United  States 
was  willing  should  be  the  character  of  the  canal  and  not  in- 
tended to  limit  or  hamper  the  United  States  in  the  exercise  of 


200  Memorandum  to  Act 

its  sovereign  power  to  deal  with  its  own  commerce,  using  its 
own  canal  in  whatsoever  manner  it  saw  fit. 

If  there  is  no  "difference  in  principle  between  the  United 
States  charging  tolls  to  its  own  shipping  only  to  refund  them 
and  remitting  tolls  altogether,"  as  the  British  protest  declares, 
then  the  irresistible  conclusion  is  that  the  United  States,  al- 
though it  owns,  controls,  and  has  paid  for  the  canal,  is  re- 
stricted by  treaty  from  aiding  its  own  commerce  in  the  way 
that  all  the  other  nations  of  the  world  may  freely  do.  It 
would  scarcely  be  claimed  that  the  setting  out  in  a  treaty  be- 
tween the  United  States  and  Great  Britain  of  certain  rules 
adopted  by  the  United  States  as  the  basis  of  the  neutraliza- 
tion of  the  canal  would  bind  any  Government  to  do  or  refrain 
from  doing  anything  other  than  the  things  required  by  the 
rules  to  insure  the  privilege  of  use  and  freedom  from  dis- 
crimination. Since  the  rules  do  not  provide  as  a  condition 
for  the  privilege  of  use  upon  equal  terms  with  other  nations 
that  other  nations  desiring  to  build  up  a  particular  trade 
involving  the  use  of  the  canal  shall  not  either  directly  agree 
to  pay  the  tolls  or  to  refund  to  its  ships  the  tolls  collected 
for  the  use  of  the  canal,  it  is  evident  that  the  treaty  does  not 
affect  that  inherent,  sovereign  right,  unless,  which  is  not 
likely,  it  be  claimed  that  the  promulgation  by  the  United  States 
of  these  rules  insuring  all  nations  against  its  discrimination, 
would  authorize  the  United  States  to  pass  upon  the  action 
of  other  nations  and  require  that  no  one  of  them  should 
grant  to  its  shipping  larger  subsidies  or  more  liberal  induce- 
ment for  the  use  of  the  canal  than  were  granted  by  others;  in 
other  words,  that  the  United  States  has  the  power  to  equalize 
the  practice  of  other  nations  in  this  regard. 

If  it  is  correct,  then,  to  assume  that  there  is  nothing  in  the 
Hay-Pauncefote  Treaty  preventing  Great  Britain  and  the 
other  nations  from  extending  such  favors  as  they  may  see  fit 
to  their  shipping  using  the  canal,  and  doing  it  in  the  way 
they  see  fit,  and  if  it  is  also  right  to  assume  that  there  is  noth- 
ing in  the  treaty  that  gives  the  United  States  any  supervision 


Memorandum  to  Act  201 

over,  or  right  to  complain  of,  such  action,  then  the  British  pro- 
test leads  to  the  absurd  conclusion  that  this  Government  in 
constructing  the  canal,  maintaining  the  canal,  and  defending 
the  canal,  finds  itself  shorn  of  its  right  to  deal  with  its  own 
commerce  in  its  own  way,  while  all  other  nations  using  the 
canal  in  competition  with  American  commerce  enjoy  that  right 
and  power  unimpaired. 

The  British  protest,  therefore,  is  a  proposal  to  read  into 
the  treaty  a  surrender  by  the  United  States  of  its  right  to 
regulate  its  own  commerce  in  its  own  way  and  by  its  own  meth- 
ods— a  right  which  neither  Great  Britain  herself,  nor  any 
other  nation  that  may  use  the  canal,  has  surrendered  or  pro- 
poses to  surrender.  The  surrender  of  this  right  is  not  claimed 
to  be  in  terms.  It  is  only  to  be  inferred  from  the  fact  that 
the  United  States  has  conditionally  granted  to  all  the  nations 
the  use  of  the  canal  without  discrimination  by  the  United 
States  between  the  grantees;  but  as  the  treaty  leaves  all 
nations  desiring  to  use  the  canal  with  full  right  to  deal  with 
their  own  vessels  as  they  see  fit,  the  United  States  would 
only  be  discriminating  against  itself  if  it  were  to  recognize 
the  soundness  of  the  British  contention. 

The  bill  here  in  question  does  not  positively  do  more  than  to 
discriminate  in  favor  of  the  coastwise  trade,  and  the  British 
protest  seems  to  recognize  a  distinction  between  such  exemp- 
tion and  the  exemption  of  American  vessels  engaged  in  foreign 
trade.  In  effect,  of  course,  there  is  a  substantial  and  practical 
difference.  The  American  vessels  in  foreign  trade  come  into 
competition  with  vessels  of  other  nations  in  that  same  trade, 
while  foreign  vessels  are  forbidden  to  engage  in  the  American 
coastwise  trade.  While  the  bill  here  in  question  seems  to  vest 
the  President  with  discretion  to  discriminate  in  fixing  tolls  in 
favor  of  American  ships  and  against  foreign  ships  engaged  in 
foreign  trade,  within  the  limitation  of  the  range  from  50  cents 
a  ton  to  $1.25  a  net  ton,  there  is  nothing  in  the  act  to  compel 
the  President  to  make  such  a  discrimination.  It  is  not,  there- 
fore, necessary  to  discuss  the  policy  of  such  discrimination 


202  Memorandum  to  Act 

until  the  question  may  arise  in  the  exercise  of  the  President's 
discretion. 

The  policy  of  exempting  the  coastwise  trade  from  all  tolls 
really  involves  the  question  of  granting  a  Government  subsidy 
for  the  purpose  of  encouraging  that  trade  in  competition  with 
the  trade  of  the  transcontinental  railroads.  I  approve  this 
policy.  It  is  in  accord  with  the  historical  course  of  the  Gov- 
ernment in  giving  Government  aid  to  the  construction  of  the 
transcontinental  roads.  It  is  now  merely  giving  Government 
aid  to  a  means  of  transportation  that  competes  with  those 
transcontinental  roads. 

Second.  The  bill  permits  the  registry  of  foreign-built  ves- 
sels as  vessels  of  the  United  States  for  foreign  trade,  and  it 
also  permits  the  admission  without  duty  of  materials  for  the 
construction  and  repair  of  vessels  in  the  United  States.  This 
is  objected  to  on  the  ground  that  it  will  interfere  with  the 
shipbuilding  interests  of  the  United  States.  I  can  not  concur 
in  this  view.  The  number  of  vessels  of  the  United  States  en- 
gaged in  foreign  trade  is  so  small  that  the  work  done  by  the 
present  shipyards  is  almost  wholly  that  of  constructing  ves- 
sels for  the  coastwise  trade  or  Government  vessels.  In  other 
words,  there  is  substantially  no  business  for  building  ships  in 
the  foreign  trade  in  the  shipyards  of  the  United  States  which 
will  be  injured  by  this  new  provision.  It  is  hoped  that  this 
registry  of  foreign-built  ships  in  American  foreign  trades  will 
prove  to  be  a  method  of  increasing  our  foreign  shipping.  The 
experiment  will  hurt  no  interest  of  ours,  and  we  can  observe 
its  operation.  If  it  proves  to  extend  our  commercial  flag  to 
the  high  seas,  it  will  supply  a  long-felt  want. 

Third.  Section  5  of  the  interstate  commerce  act  is  amended 
by  forbidding  railroad  companies  to  own,  lease,  operate,  con- 
trol, or  have  any  interest  in  any  common  carrier  by  water 
operated  through  the  Panama  Canal  with  which  such  railroad 
or  other  carrier  does  or  may  compete  for  traffic.  I  have 
twice  recommended  such  restriction  as  to  the  Panama  Canal. 
It  was  urged  upon  me  that  the  Interstate  Commerce  Com- 


Memorandum  to  Act  203 

mission  might  control  the  trade  so  as  to  prevent  an  abuse 
from  the  joint  ownership  of  railroads  and  of  Panama  steam- 
ships competing  with  each  other,  and  therefore  that  this  rad- 
ical provision  was  not  necessary.  Conference  with  the  Inter- 
state Commerce  Commission,  however,  satisfied  me  that  such 
control  would  not  be  as  effective  as  this  restriction.  The  dif- 
ficulty is  that  the  interest  of  the  railroad  company  is  so  much 
larger  in  its  railroad  and  in  the  maintenance  of  its  railroad 
rates  than  in  making  a  profit  out  of  the  steamship  line  that  it 
can  afford  temporarily  to  run  its  vessels  for  nearly  nothing 
in  order  to  drive  out  of  the  business  independent  steamship 
lines,  and  thus  obtain  complete  control  of  the  shipping  in  the 
trade  through  the  canal  and  regulate  the  rates  according  to  the 
interest  of  the  railroad  company.  Jurisdiction  is  conferred 
on  the  Interstate  Commerce  Commission  finally  to  determine 
the  question  of  fact  as  to  the  competition  or  possibility  of 
competition  of  the  water  carrier  with  the  railroad,  and 
this  may  be  done  in  advance  of  any  investment  of  capi- 
tal. 

Fourth.  The  effect  of  the  amendment  of  section  5  of  the 
interstate-commerce  act  also  is  extended  so  as  to  make  it  un- 
lawful for  railroad  companies  owning  or  controlling  lines  of 
steamships  in  any  other  part  of  the  jurisdiction  of  the  United 
States  to  continue  to  do  so,  and  as  to  such  railroad  companies 
and  such  water  carriers  the  Interstate  Commerce  Commission 
is  given  the  duty  and  power  not  only  finally  to  determine 
the  question  of  competition  or  possibility  of  competition, 
but  also  to  determine  "that  the  specified  service  by  water  is 
being  operated  in  the  interest  of  the  public  and  is  of  advan- 
tage to  the  convenience  and  commerce  of  the  people,  and  that 
such  extension  will  neither  exclude,  prevent,  nor  reduce  com- 
petition on  the  route  by  water  under  consideration";  and,  if 
it  finds  this  to  be  the  case,  to  extend  the  time  during  which 
such  service  by  water  may  continue  beyond  the  date  fixed  in 
the  act  for  its  first  operation — to  wit,  July  1,  1914.  When- 
ever the  time  is  extended,  then  the  water  carrier,  its  rates 


204  Memorandum  to  Act 

and  schedules,  and  practices  are  brought  within  the  control 
of  the  Interstate  Commerce  Commission.  How  far  it  is 
within  the  power  of  Congress  to  delegate  to  the  Interstate 
Commerce  Commission  such  wide  discretion  it  is  unnecessary 
now  to  discuss.  There  is  ample  time  between  now  and  the 
time  of  this  provision  of  the  act's  going  into  effect  to  have 
the  matter  examined  by  the  Supreme  Court,  or  to  change  the 
form  of  the  legislation,  should  it  be  deemed  necessary.  Cer- 
tainly the  suggested  invalidity  of  this  section,  if  true,  would 
not  invalidate  the  entire  act,  the  remainder  of  which  may  well 
stand  without  regard  to  this  provision. 

Fifth.  The  final  objection  is  to  a  provision  which  prevents 
the  owner  of  any  steamship  who  is  guilty  of  violating  the  anti- 
trust law  from  using  the  canal.  It  is  quite  evident  that  this 
section  applies  only  to  those  vessels  engaged  in  the  trade  in 
which  there  is  a  monopoly  contrary  to  our  Federal  statute, 
and  it  is  a  mere  injunctive  process  against  the  continuance  of 
such  monopolistic  trade.  It  adds  the  penalty  of  denying  the 
use  of  the  canal  to  a  person  or  corporation  violating  the  anti- 
trust law.  It  may  have  some  practical  operation  where  the 
business  monopolized  is  transportation  by  ships,  but  it  does 
not  become  operative  to  prevent  the  use  of  the  canal  until 
the  decree  of  the  court  shall  have  established  the  fact  of 
the  guilt  of  the  owner  of  the  vessel.  While  the  penalties  of 
the  antitrust  law  seem  to  me  to  be  quite  sufficient  already,  I 
do  not  know  that  this  new  remedy  against  a  particular  kind 
of  a  trust  may  not  sometimes  prove  useful. 

In  a  message  sent  to  Congress  after  this  bill  had  passed 
both  Houses  I  ventured  to  suggest  a  possible  amendment  by 
which  all  persons,  and  especially  all  British  subjects  who  felt 
aggrieved  by  the  provisions  of  the  bill  on  the  ground  that 
they  are  in  violation  of  the  Hay-Pauncef ote  Treaty,  might 
try  that  question  out  in  the  Supreme  Court  of  the  United 
States.  I  think  this  would  have  satisfied  those  who  oppose 
the  view  which  Congress  evidently  entertains  of  the  treaty 
and  might  avoid  the  necessity  for  either  diplomatic  negotia- 


Memorandum  to  Act  205 

tion  or  further  decision  by  an  arbitral  tribunal.  Congress, 
however,  has  not  thought  it  wise  to  accept  the  suggestion, 
and  therefore  I  must  proceed  in  the  view  which  I  have  ex- 
pressed, and  am  convinced  is  the  correct  one,  as  to  the  proper 
construction  of  the  treaty  and  the  limitations  which  it  im- 
poses upon  the  United  States.  I  do  not  find  that  the  bill 
here  in   question   violates   those   limitations. 

On  the  whole,  I  believe  the  bill  to  be  one  of  the  most  bene- 
ficial that  has  passed  this  or  any  other  Congress,  and  I  find 
no  reason  in  the  objections  made  to  the  bill  which  should  lead 
me  to  delay,  until  another  session  of  Congress,  provisions 
that  are  imperatively  needed  now  in  order  that  due  prepa- 
ration by  the  world  may  be  made  for  the  opening  of  the 
canal. 

1  Wm.  H.  Taft. 

The  White  House,  August  24,  1912. 


[Inclosure  3.] 

[PANAMA  CANAL  TOLL  RATES.] 

By  the  President  of  the  United  States  of  America. 

A  PROCLAMATION. 

I,  William  Howard  Taft,  President  of  the  United  States 
of  America,  by  virtue  of  the  power  and  authority  vested  in 
me  by  the  Act  of  Congress,  approved  August  twenty-fourth, 
nineteen  hundred  and  twelve,  to  provide  for  the  opening, 
maintenance,  protection  and  operation  of  the  Panama  Canal 
and  the  sanitation  and  government  of  the  Canal  Zone,  do 
hereby  prescribe  and  proclaim  the  following  rates  of  toll  to 
be  paid  by  vessels  using  the  Panama  Canal: 

1.  On  merchant  vessels  carrying  passengers  or  cargo  one  dollar 
and  twenty  cents  ($1.20)  per  net  vessel  ton — each  one  hundred 
(100)  cubic  feet — of  actual  earning  capacity. 

2.  On  vessels  in  ballast  without  passengers  or  cargo  forty  (40) 
per  cent,  less  than  the  rate  of  tolls  for  vessels  with  passengers  or 
cargo. 

3.  Upon  naval  vessels,  other  than  transports,  colliers,  hospital 
ships  and  supply  ships,  fifty  (50)  cents  per  displacement  ton. 


206  Speech  of  Elihu  Eoot 

4.  Upon  army  and  navy  transports,  colliers,  hospital  ships  and 
supply  ships  one  dollar  and  twenty  cents  ($1.20)  per  net  ton,  the 
vessels  to  be  measured  by  the  same  rules  as  are  employed  in  de- 
termining the  net  tonnage  of  merchant  vessels. 

The  Secretary  of  War  will  prepare  and  prescribe  such 
rules  for  the  measurement  of  vessels  and  such  regulations  as 
may  be  necessary  and  proper  to  carry  this  proclamation  into 
full  force  and  effect. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and 
caused  the  seal  of  the  United  States  to  be  affixed. 

Done  at  the  City  of  Washington  this  thirteenth 
day  of  November  in  the  year  of  our  Lord 
one  thousand  nine  hundred  and  twelve 
and  of  the  independence  of  the  United 
States     the     one     hundred     and     thirty- 


seventh. 


[seal.] 


Wm.  H.  Taft. 


By  the  President: 

P.  C.  Knox, 

Secretary  of  State. 


SPEECH  OF  HON.  ELIHU  ROOT 

OP   NEW  YORK 

IN  THE  SENATE  OF  THE  UNITED  STATES 
January  21,  1913 

PANAMA  CANAL  TOLLS 
Mr.  President,  in  the  late  days  of  last  summer,  after  nearly 
nine  months  of  continuous  session,  Congress  enacted,  in  the 
bill  to  provide  for  the  administration  of  the  Panama  Canal,  a 
provision  making  a  discrimination  between  the  tolls  to  be 
charged  upon  foreign  vessels  and  the  tolls  to  be  charged  upon 
American  vessels  engaged  in  coastwise  trade.  We  all  must 
realize,  as  we  look  back,  that  when  that  provision  was  adopted 
the  Members  of  both  Houses  were  much  exhausted;  our  minds 


Speech  of  Elihu  Root  207 

were  not  working  with  their  full  vigor;  we  were  weary  phys- 
ically and  mentally.  Such  discussion  as  there  was  was  to 
empty  seats.  In  neither  House  of  Congress,  during  the  period 
that  this  provision  was  under  discussion,  could  there  be  found 
more  than  a  scant  dozen  or  two  of  Members.  The  provision 
has  been  the  cause  of  great  regret  to  a  multitude  of  our  fel- 
low citizens,  whose  good  opinion  we  all  desire  and  whose 
leadership  of  opinion  in  the  country  makes  their  approval  of 
the  course  of  our  Congress  an  important  element  in  maintain- 
ing that  confidence  in  government  which  is  so  essential  to  its 
success.  The  provision  has  caused  a  painful  impression 
throughout  the  world  that  the  United  States  has  departed 
from  its  often-announced  rule  of  equality  of  opportunity  in 
the  use  of  the  Panama  Canal,  and  is  seeking  a  special  advan- 
tage for  itself  in  what  is  believed  to  be  a  violation  of  the  obli- 
gations of  a  treaty.  Mr.  President,  that  opinion  of  the  civi- 
lized world  is  something  which  we  may  not  lightly  disregard. 
"A  decent  respect  to  the  opinions  of  mankind"  was  one  of  the 
motives  stated  for  the  people  of  these  colonies  in  the  great 
Declaration  of  American  Independence. 

The  effect  of  the  provision  has  thus  been  doubly  unfortu- 
nate, and  I  ask  the  Senate  to  listen  to  me  while  I  endeavor 
to  state  the  situation  in  which  we  find  ourselves;  to  state  the 
case  which  is  made  against  the  action  that  we  have  taken,  in 
order  that  I  may  present  to  the  Senate  the  question  whether 
we  should  not  either  submit  to  an  impartial  tribunal  the 
question  whether  we  are  right ;  so  that  if  we  are  right,  we  may 
be  vindicated  in  the  eyes  of  all  the  world,  or  whether  we 
should  not,  by  a  repeal  of  the  provision,  retire  from  the  posi- 
tion which  we  have  taken. 

In  the  year  1850,  Mr.  President,  there  were  two  great  pow- 
ers in  possession  of  the  North  American  Continent  to  the  north 
of  the  Rio  Grande.  The  United  States  had  but  just  come  to 
its  full  stature.  By  the  Webster-Ashburton  treaty  of  1842  our 
northeastern  boundary  had  been  settled,  leaving  to  Great  Brit- 
ain that  tremendous  stretch  of  seacoast  including  Nova  Scotia, 


208  Speech  of  Elihu  Eoot 

New  Brunswick,  Newfoundland,  Labrador,  and  the  shores  of 
the  Gulf  of  St.  Lawrence,  now  forming  the  Province  of  Que- 
bec. In  1846  the  Oregon  boundary  had  been  settled,  assuring 
to  the  United  States  a  title  to  that  vast  region  which  now  con- 
stitutes the  States  of  Washington,  Oregon,  and  Idaho.  In 
1848  the  treaty  of  Guadalupe-Hidalgo  had  given  to  us  that 
great  empire  wrested  from  Mexico  as  a  result  of  the  Mexican 
War,  which  now  spreads  along  the  coast  of  the  Pacific  as  the 
State  of  California  and  the  great  region  between  California 
and  Texas. 

Inspired  by  the  manifest  requirements  of  this  new  empire, 
the  United  States  turned  its  attention  to  the  possibility  of 
realizing  the  dream  of  centuries  and  connecting  its  two  coasts 
— its  old  coast  upon  the  Atlantic  and  its  new  coast  upon  the 
Pacific — by  a  ship  canal  through  the  Isthmus;  but  when  it 
turned  its  attention  in  that  direction  it  found  the  other  empire 
holding  the  place  of  vantage.  Great  Britain  had  also  her 
coast  upon  the  Atlantic  and  her  coast  upon  the  Pacific,  to  be 
joined  by  a  canal.  Further  than  that,  Great  Britain  was  a 
Caribbean  power.  She  had  Bermuda  and  the  Bahamas;  she 
had  Jamaica  and  Trinidad ;  she  had  the  Windward  Islands 
and  the  Leeward  Islands;  she  had  British  Guiana  and  British 
Honduras;  she  had,  moreover,  a  protectorate  over  the  Mos- 
quito coast,  a  great  stretch  of  territory  upon  the  eastern  shore 
of  Central  America  which  included  the  river  San  Juan  and 
the  valley  and  harbor  of  San  Juan  de  Nicaragua,  or  Grey- 
town.  All  men's  minds  then  were  concentrated  upon  the 
Nicaragua  Canal  route,  as  they  were  until  after  the  treaty 
of  1901  was  made. 

And  thus  when  the  United  States  turned  its  attention  to- 
ward joining  these  two  coasts  by  a  canal  through  the  Isthmus 
it  found  Great  Britain  in  possession  of  the  eastern  end  of  the 
route  which  men  generally  believed  would  be  the  most  avail- 
able route  for  the  canal.  Accordingly,  the  United  States 
sought  a  treaty  with  Great  Britain  by  which  Great  Britain 
should  renounce  the  advantage  which  she  had  and  admit  the 


Speech  of  Elihu  Root  209 

United  States  to  equal  participation  with  her  in  the  control 
and  the  protection  of  a  canal  across  the  Isthmus.  From  that 
came  the  Clayton-Bulwer  treaty. 

Let  me  repeat  that  this  treaty  was  sought  not  by  England 
but  by  the  United  States.  Mr.  Clayton,  who  was  Secretary 
of  State  at  the  time,  sent  our  minister  to  France,  Mr.  Rives, 
to  London  for  the  purpose  of  urging  upon  Lord  Palmerston 
the  making  of  the  treaty.  The  treaty  was  made  by  Great 
Britain  as  a  concession  to  the  urgent  demands  of  the  United 
States. 

I  should  have  said,  in  speaking  about  the  urgency  with 
which  the  United  States  sought  the  Clayton-Bulwer  treaty, 
that  there  were  two  treaties  made  with  Nicaragua,  one  by 
Mr.  Heis  and  one  by  Mr.  Squire,  both  representatives  of  the 
United  States.  Each  gave,  so  far  as  Nicaragua  could,  great 
powers  to  the  United  States  in  regard  to  the  construction  of  a 
canal,  but  they  were  made  without  authorization  from  the 
United  States,  and  they  were  not  approved  by  the  Govern- 
ment of  the  United  States  and  were  never  sent  to  the  Senate. 
Mr.  Clayton,  however,  held  those  treaties  in  abeyance  as  a 
means  of  inducing  Great  Britain  to  enter  into  the  Clayton- 
Bulwer  treaty.  He  held  them  practically  as  a  whip  oyer  the 
British  negotiators,  and  having  accomplished  the  purpose 
they  were  thrown  into  the  waste  basket. 

By  that  treaty  Great  Britain  agreed  with  the  United  States 
that  neither  Government  should  "ever  obtain  or  maintain  for 
itself  any  exclusive  control  over  the  ship  canal";  that  neither 
would  "make  use  of  any  protection"  which  either  afforded  to 
a  canal  "or  any  alliance  which  either"  might  have  "with 
any  State  or  people  for  the  purpose  of  erecting  or  maintain- 
ing any  fortifications,  or  of  occupying,  fortifying,  or 
colonizing  Nicaragua,  Costa  Rica,  the  Mosquito  coast,  or 
any  part  of  Central  America,  or  of  assuming  or  ex- 
ercising dominion  over  the  same,"  and  that  neither  would 
"take  advantage  of  any  intimacy,  or  use  any  alli- 
ance,   connection,    or   influence   that   either"    might   "possess 


210  Speech  of  Elihu  Eoot 

with  any  State  or  Government  through  whose  territory 
the  said  canal  may  pass,  for  the  purpose  of  acquir- 
ing or  holding,  directly  or  indirectly,  for  the  citizens  or  sub- 
jects of  the  one,  any  rights  or  advantages  in  regard  to  com- 
merce or  navigation  through  the  said  canal  which  shall  not 
be  offered  on  the  same  terms  to  the  citizens  or  subjects  of  the 
other." 

You  will  observe,  Mr.  President,  that  under  these  pro- 
visions the  United  States  gave  up  nothing  that  it  then  had. 
Its  obligations  were  entirely  looking  to  the  future;  and  Great 
Britain  gave  up  its  rights  under  the  protectorate  over  the 
Mosquito  coast,  gave  up  its  rights  to  what  was  supposed  to 
be  the  eastern  terminus  of  the  canal.  And,  let  me  say 
without  recurring  to  it  again,  under  this  treaty,  after  much 
discussion  which  ensued  as  to  the  meaning  of  its  terms,  Great 
Britain  did  surrender  her  rights  to  the  Mosquito  coast,  so  that 
the  position  of  the  United  States  and  Great  Britain  became 
a  position  of  absolute  equality.  Under  this  treaty  also  both 
parties  agreed  that  each  should  "enter  into  treaty  stipulations 
with  such  of  the  Central  American  States  as  they"  might 
"deem  advisable  for  the  purpose" — I  now  quote  the  words  of 
the  treaty — "for  the  purpose  of  more  effectually  carrying  out 
the  great  design  of  this  convention,  namely,  that  of  construct- 
ing and  maintaining  the  said  canal  as  a  ship  communication 
between  the  two  oceans  for  the  benefit  of  mankind,  on  equal 
terms  to  all,  and  of  protecting  the  same." 

That  declaration,  Mr.  President,  is  the  cornerstone  of  the 
rights  of  the  United  States  upon  the  Isthmus  of  Panama, 
rights  having  their  origin  in  a  solemn  declaration  that  there 
should  be  constructed  and  maintained  a  ship  canal  "between 
the  two  oceans  for  the  benefit  of  mankind,  on  equal  terms  to 
all." 

In  the  eighth  article  of  that  treaty  the  parties  agreed: 

The  Governments  of  the  United  States  and  Great  Britain  having 
not  only  desired,  in  entering  into  this  convention,  to  accomplish  a 
particular  object,  but  also  to  establish  a  general  principle,   they 


Speech  of  Elihu  Eoot  211 

hereby  agree  to  extend  their  protection,  by  treaty  stipulations,  to 
any  other  practicable  communications,  whether  by  canal  or  railway, 
across  the  isthmus  which  connects  North  and  South  America,  and 
especially  to  the  interoceanic  communications,  should  the  same 
prove  to  be  practicable,  whether  by  canal  or  railway,  which  are 
now  proposed  to  be  established  by  the  way  of  Tehuantepec  or 
Panama.  In  granting,  however,  their  joint  protection  to  any  such 
canals  or  railways  as  are  by  this  article  specified,  it  is  always 
understood  by  the  United  States  and  Great  Britain  that  the 
parties  constructing  or  owning  the  same  shall  impose  no  other 
charges  or  conditions  of  traffic  thereupon  than  the  aforesaid  Gov- 
ernments shall  approve  of  as  just  and  equitable;  and  that  the 
same  canals  or  railways,  being  open  to  the  citizens  and  subjects 
of  the  United  States  and  Great  Britain  on  equal  terms,  shall  also 
be  open  on  like  terms  to  the  citizens  and  subjects  of  every  other 
State  which  is  willing  to  grant  thereto  such  protection  as  the 
United  States  and  Great  Britain  engage  to  afford. 

There,  Mr.  President,  is  the  explicit  agreement  for  equality 
of  treatment  to  the  citizens  of  the  United  States  and  to  the 
citizens  of  Great  Britain  in  any  canal,  wherever  it  may  be 
constructed,  across  the  Isthmus.  That  was  the  fundamental 
principle  embodied  in  the  treaty  of  1850.  And  we  are  not 
without  an  authoritative  construction  as  to  the  scope  and  re- 
quirements of  an  agreement  of  that  description,  because  we 
have  another  treaty  with  Great  Britain — a  treaty  which 
formed  one  of  the  great  landmarks  in  the  diplomatic  history 
of  the  world,  and  one  of  the  great  steps  in  the  progress  of 
civilization — the  treaty  of  Washington  of  1871,  under  which 
the  Alabama  claims  were  submitted  to  arbitration.  Under 
that  treaty  there  were  provisions  for  the  use  of  the  American 
canals  along  the  waterway  of  the  Great  Lakes,  and  the  Cana- 
dian canals  along  the  same  line  of  communication,  upon  equal 
terms  to  the  citizens  of  the  two  countries. 

Some  years  after  the  treaty,  Canada  undertook  to  do  some- 
thing quite  similar  to  what  we  have  undertaken  to  do  in  this 
law  about  the  Panama  Canal.  It  provided  that  while  nom- 
inally a  toll  of  20  cents  a  ton  should  be  charged  upon  the 
merchandise  both  of  Canada  and  of  the  United  States  there 
should  be  a  rebate  of  18  cents  for  all  merchandise  which  went 
to  Montreal  or  beyond,  leaving  a  toll  of  but  2  cents  a  ton  for 


212  Speech  of  Elihu  Root 

that  merchandise.  The  United  States  objected;  and  I  beg 
your  indulgence  while  I  read  from  the  message  of  President 
Cleveland  upon  that  subject,  sent  to  the  Congress  August  23, 
1888.     He  says : 

By  article  27  of  the  treaty  of  1871  provision  was  made  to  secure 
to  the  citizens  of  the  United  States  the  use  of  the  Welland,  St. 
Lawrence,  and  other  canals  in  the  Dominion  of  Canada  on  terms  of 
equality  with  the  inhabitants  of  the  Dominion,  and  to  also  secure 
to  the  subjects  of  Great  Britain  the  use  of  the  St.  Clair  Flats 
Canal  on  terms  of  equality  with  the  inhabitants  of  the  United 
States. 

The  equality  with  the  inhabitants  of  the  Dominion  which  we 
were  promised  in  the  use  of  the  canals  of  Canada  did  not  secure  to 
us  freedom  from  tolls  in  their  navigation,  but  we  had  a  right  to 
expect  that  we,  being  Americans  and  interested  in  American  com- 
merce, would  be  no  more  burdened  in  regard  to  the  same  than 
Canadians  engaged  in  their  own  trade;  and  the  whole  spirit  of 
the  concession  made  was,  or  should  have  been,  that  merchandise 
and  property  transported  to  an  American  market  through  these 
canals  should  not  be  enhanced  in  its  cost  by  tolls  many  times 
higher  than  such  as  were  carried  to  an  adjoining  Canadian  market. 
All  our  citizens,  producers  and  consumers  as  well  as  vessel  owners, 
were  to  enjoy  the  equality  promised. 

And  yet  evidence  has  for  some  time  been  before  the  Congress, 
furnished  by  the  Secretary  of  the  Treasury,  showing  that  while 
the  tolls  charged  in  the  first  instance  are  the  same  to  all,  such 
vessels  and  cargoes  as  are  destined  to  certain  Canadian  ports — 

Their  coastwise  trade — 

are  allowed  a  refund  of  nearly  the  entire  tolls,  while  those  bound 
for  American  ports  are  not  allowed  any  such  advantage. 

To  promise  equality  and  then  in  practice  make  it  conditional 
upon  our  vessels  doing  Canadian  business  instead  of  their  own, 
is  to  fulfill  a  promise  with  the  shadow  of  performance. 

Upon  the  representations  of  the  United  States  embodying 
that  view,  Canada  retired  from  the  position  which  she  had 
taken,  rescinded  the  provision  for  differential  tolls,  and  put 
American  trade  going  to  American  markets  on  the  same  basis 
of  tolls  as  Canadian  trade  going  to  Canadian  markets.  She 
did  not  base  her  action  upon  any  idea  that  there  was  no  com- 
petition between  trade  to  American  ports  and  trade  to  Ca- 


Speech  of  Elihu  Boot  213 

nadian  ports,  but  she  recognized  the  law  of  equality  in  good 
faith  and  honor;  and  to  this  day  that  law  is  being  accorded 
to  us  and  by  each  great  nation  to  the  other. 

I  have  said,  Mr.  President,  that  the  Clayton-Bulwer  treaty 
was  sought  by  us.  In  seeking  it  we  declared  to  Great  Britain 
what  it  was  that  we  sought.  I  ask  the  Senate  to  listen  to  the 
declaration  that  we  made  to  induce  Great  Britain  to  enter 
into  that  treaty — to  listen  to  it  because  it  is  the  declaration 
by  which  we  are  in  honor  bound  as  truly  as  if  it  were  signed 
and  sealed. 

Here  I  will  read  from  the  report  made  to  the  Senate  on  the 
5th  day  of  April,  1900,  by  Senator  Cusliman  K.  Davis,  then 
chairman  of  the  Committee  on  Foreign  Relations.  So  you 
will  perceive  that  this  is  no  new  matter  to  the  Senate  of  the 
United  States  and  that  I  am  not  proceeding  upon  my  own 
authority  in  thinking  it  worthy  of  your  attention. 

Mr.  Rives  was  instructed  to  say  and  did  say  to  Lord  Pal- 
merston,  in  urging  upon  him  the  making  of  the  Clayton-Bul- 
wer treaty,  this: 

The  United  States  sought  no  exclusive  privilege  or  preferential 
right  of  any  kind  in  regard  to  the  proposed  communication,  and 
their  sincere  wish,  if  it  should  be  found  practicable,  was  to  see  it 
dedicated  to  the  common  use  of  all  nations  on  the  most  liberal 
terms  and  a  footing  of  perfect  equality  for  all. 

That  the  United  States  would  not,  if  they  could,  obtain  any 
exclusive  right  or  privilege  in  a  great  highway  which  naturally 
belonged  to  all  mankind. 

That,  sir,  was  the  spirit  of  the  Clayton-Bulwer  convention. 
That  was  what  the  United  States  asked  Great  Britain  to 
agree  upon.  That  self-denying  declaration  underlaid  and 
permeated  and  found  expression  in  the  terms  of  the  Clayton- 
Bulwer  convention.  And  upon  that  representation  Great  Brit- 
ain in  that  convention  relinquished  her  coign  of  vantage  which 
she  herself  had  for  the  benefit  of  her  great  North  American 
empire  for  the  control  of  the  canal  across  the  Isthmus. 

Mr.  Cummins.    Mr.  President — 


214  Speech  of  Elihu  Eoot 

The  President  pro  tempore.  Does  the  Senator  from  New 
York  yield  to  the  Senator  from  Iowa? 

Mr.  Root.    I  do,  but — 

Mr.  Cummins.  I  will  ask  the  Senator  from  New  York 
whether  he  prefers  that  there  shall  be  no  interruptions?  If 
he  does,  I  shall  not  ask  any  question. 

Mr.  Root.  Mr.  President,  I  should  prefer  it,  because  what 
I  have  to  say  involves  establishing  the  relation  between  a  con- 
siderable number  of  acts  and  instruments,  and  interruptions 
naturally  would  destroy  the  continuity  of  my  statement. 

Mr.  Cummins.  The  question  I  was  about  to  ask  was  purely 
a  historic  one. 

Mr.  Root.     I  shall  be  very  glad  to  answer  the  Senator. 

Mr.  Cummins.  The  Senator  has  stated  that  at  the  time  of 
the  Clayton-Bulwer  treaty  we  were  excluded  from  the  Mos- 
quito coast  by  the  protectorate  exercised  by  Great  Britain 
over  that  coast.  My  question  is  this :  Had  we  not  at  that  time 
a  treaty  with  New  Granada  that  gave  us  equal  or  greater 
rights  upon  the  Isthmus  of  Panama  than  were  claimed  even 
by  Great  Britain  over  the  Mosquito  coast? 

Mr.  Root.  Mr.  President,  we  had  the  treaty  of  1846  with 
New  Granada,  under  which  we  undertook  to  protect  any  rail- 
way or  canal  across  the  Isthmus.  But  that  did  riot  apply  to 
the  Nicaragua  route,  which  was  then  supposed  to  be  the  most 
available  route  for  a  canal. 

Mr.  Cummins.  I  quite  agree  with  the  Senator  about  that. 
I  only  wanted  it  to  appear  in  the  course  of  the  argument  that 
we  were  then  under  no  disability  so  far  as  concerned  building 
a  canal  across  the  Isthmus  of  Panama. 

Mr.  Root.  We  were  under  a  disability  so  far  as  concerned 
building  a  canal  by  the  Nicaragua  route,  which  was  regarded 
as  the  available  route  until  the  discussion  in  the  Senate  after 
1901,  in  which  Senator  Spooner  and  Senator  Hanna  prac- 
tically changed  the  judgment  of  the  Senate  with  regard  to 
what  was  the  proper  route  to  take.    And  in  the  treaty  of 


Speech  of  Elihu  Root  215 

1850,  so  anxious  were  we  to  secure  freedom  from  the  claims 
of  Great  Britain  on  the  eastern  end  of  the  Nicaragua  route 
that,  as  I  have  read,  we  agreed  that  the  same  contract  should 
apply  not  merely  to  the  Nicaragua  route  but  to  the  whole  of 
the  Isthmus.  So  that  from  that  time  on  the  whole  Isthmus 
was  impressed  by  the  same  obligations  which  were  impressed 
upon  the  Nicaragua  route,  and  whatever  rights  we  had  under 
our  treaty  of  1846  with  New  Granada  we  were  thenceforth 
bound  to  exercise  with  due  regard  and  subordination  to  the 
provisions  of  the  Clayton-Bulwer  treaty. 

Mr.  President,  after  the  lapse  of  some  30  years,  during 
the  early  part  of  which  we  were  strenuously  insisting  upon 
the  observance  by  Great  Britain  of  her  obligations  under  the 
Clayton-Bulwer  treaty  and  during  the  latter  part  of  which 
we  were  beginning  to  be  restive  under  our  obligations  by  rea- 
son of  that  treaty,  we  undertook  to  secure  a  modification  of  it 
from  Great  Britain.  In  the  course  of  that  undertaking  there 
was  much  discussion  and  some  difference  of  opinion  as  to  the 
continued  obligations  of  the  treaty.  But  I  think  that  was 
finally  put  at  rest  by  the  decision  of  Secretary  Olney  in  the 
memorandum  upon  the  subject  made  by  him  in  the  year  1896. 
In  that  memorandum  he  said: 

Under  these  circumstances,  upon  every  principle  which  governs 
(he  relation  to  each  other,  either  of  nations  or  of  individuals,  the 
United  States  is  completely  estopped  from  denying  that  the  treaty 
is  in  full  force  and  vigor. 

If  changed  conditions  now  make  stipulations,  which  were  once 
deemed  advantageous,  either  inapplicable  or  injurious,  the  true 
remedy  is  not  in  ingenious  attempts  to  deny  the  existence  of  the 
treaty  or  to  explain  away  its  provisions,  but  in  a  direct  and 
straightforward  application  to  Great  Britain  for  a  reconsideration 
of  the  whole  matter. 

We  did  apply  to  Great  Britain  for  a  reconsideration  of  the 
whole  matter,  and  the  result  of  the  application  was  the  Hay- 
Paimcefote  treaty.  That  treaty  came  before  the  Senate  in 
two  f onns :  First,  in  the  form  of  an  instrument  signed  on  the 


216  Speech  of  Elihu  Eoot 

5th  of  February,  1900,  which  was  amended  by  the  Senate; 
and,  second,  in  the  form  of  an  instrument  signed  on  the  18th 
of  November,  1901,  which  continued  the  greater  part  of  the 
provisions  of  the  earlier  instrument,  but  somewhat  modified 
or  varied  the  amendments  which  had  been  made  by  the  Senate 
to  that  earlier  instrument. 

It  is  really  but  one  process  by  which  the  paper  sent  to  the 
Senate  in  February,  1900,  passed  through  a  course  of  amend- 
ment; first,  at  the  hands  of  the  Senate,  and  then  at  the  hands 
of  the  negotiators  between  Great  Britain  and  the  United 
States,  with  the  subsequent  approval  of  the  Senate.  In  both 
the  first  form  and  the  last  of  this  treaty  the  preamble  pro- 
vides for  preserving  the  provisions  of  article  8  of  the  Clay- 
ton-Bulwer  Treaty.  Both  forms  provide  for  the  construction 
of  the  canal  under  the  auspices  of  the  United  States  alone 
instead  of  its  construction  under  the  auspices  of  both  coun- 
tries. 

Both  forms  of  that  treaty  provide  that  the  canal  might  be — 

constructed  under  the  auspices  of  the  Government  of  the  United 
States,  either  directly  at  its  own  cost  or  by  gift  or  loan  of  money 
to  individuals  or  corporations  or  through  subscription  to  or  pur- 
chase of  stock  or  shares — 

that  being  substituted  for  the  provisions  of  the  Clayton-Bul- 
wer  treaty  under  which  both  countries  were  to  be  patrons  of 
the  enterprise. 

Under  both  forms  it  was  further  provided  that — 

Subject  to  the  provisions  of  the  present  convention,  the  said 
Government — 

The   United    States- 
shall  have  and  enjoy  all  the  rights  incident  to  such  construction,  as 
well   as  the  exclusive  right   of  providing  for  the   regulation   and 
management  of  the  canal. 

That  provision,  however,  for  the  exclusive  patronage  of  the 


Speech  of  Elihu  Eoot  217 

United  States  was  subject  to  the  initial  provision  that  the 
modification  or  change  from  the  Clayton-Bulwer  treaty  was 
to  be  for  the  construction  of  such  canal  under  the  auspices  of 
the  Government  of  the  United  States,  without  impairing  the 
general  principle  of  neutralization  established  in  article  8  of 
that  convention. 

Then  the  treaty  as  it  was  finally  agreed  to  provides  that 
the  United  States  "adopt,  as  the  basis  of  such  neutralization 
of  such  ship  canal,"  the  following  rules,  substantially  as  em- 
bodied in  the  convention  "of  Constantinople,  signed  the  29th 
of  October,  1888,"  for  the  free  navigation  of  the  Suez  Mari- 
time Canal;  that  is  to  say: 

First.  The  canal  shall  be  free  and  open ...  to  the  ves- 
sels of  commerce  and  of  war  of  all  nations  "observing  these 
rules  on  terms  of  entire  equality,  so  that  there  shall  be  no  dis- 
crimination against  any  nation  or  its  citizens  or  subjects  in 
respect  to  the  conditions  or  charges  of  traffic,  or  otherwise." 
Such  conditions  and  charges  of  traffic  shall  be  just  and  equita- 
ble. 

Then  follow  rules  relating  to  blockade  and  vessels  of  war, 
the  embarkation  and  disembarkation  of  troops,  and  the  ex- 
tension of  the  provisions  to  the  waters  adjacent  to  the  canal. 

Now,  Mr.  President,  that  rule  must,  of  course,  be  read  in 
connection  with  the  provision  for  the  preservation  of  the  prin- 
ciple of  neutralization  established  in  article  8  of  the  Clayton- 
Bulwer  Convention. 

Let  me  take  your  minds  back  again  to  article  8  of  the  Clay- 
ton-Bulwer convention,  consistently  with  which  we  are  bound 
to  construe  the  rule  established  by  the  Hay-Pauncefote  con- 
vention. The  principle  of  neutralization  provided  for  by  the 
eighth  article  is  neutralization  upon  terms  of  absolute  equality 
both  between  the  United  States  and  Great  Britain  and  between 
the  United  States  and  all  other  powers. 

It  is  always  understood — 

Says  the  eighth  article — 


218  Speech  of  Eliliu  Eoot 

by  the  United  States  and  Great  Britain  that  the  parties  construct- 
ing or  owning  the  same — 

That  is,  the  canal- — 

shall  impose  no  other  charges  or  conditions  of  traffic  thereupon 
than  the  aforesaid  Governments  shall  approve  of  as  just  and  equi- 
table, and  that  the  same  canals  or  railways,  being  open  to  the 
citizens  and  subjects  of  the  United  States  and  Great  Britain  on 
equal  terms,  shall  also  be  open  on  like  terms  to  the  citizens  and 
subjects  of  every  other  State  which  is  willing  to  grant  thereto 
such  protection  as  the  United  States  and  Great  Britain  engage  to 
afford. 

Now,  we  are  not  at  liberty  to  put  any  construction  upon  the 
Hay-Pauncefote  Treaty  which  violates  that  controlling  dec- 
laration of  absolute  equality  between  the  citizens  and  subjects 
of  Great  Britain  and  the  United   States. 

Mr.  President,  when  the  Hay-Pauncefote  convention  was 
ratified  by  the  Senate  it  was  in  full  view  of  this  controlling 
principle,  in  accordance  with  which  their  act  must  be  con- 
strued, for  Senator  Davis,  in  his  report  from  the  Committee 
on  Foreign  Relations,  to  which  I  have  already  referred — 

Mr.  McCtjmber.     On  the  treaty  in  its  form. 

Mr.  Root.  Yes;  the  report  on  the  treaty  in  its  first  form. 
Mr.  Davis  said,  after  referring  to  the  Suez  convention  of 
1888: 

The  United  States  can  not  take  an  attitude  of  opposition  to  the 
principles  of  the  great  act  of  October  22,  1888,  without  discrediting 
the  official  declarations  of  our  Government  for  50  years  on  the 
neutrality  of  an  Isthmian  canal  and  its  equal  use  by  all  nations 
without  discrimination. 

To  set  up  the  selfish  motive  of  gain  by  establishing  a  monopoly 
of  a  highway  that  must  derive  its  income  from  the  patronage  of 
all  maritime  countries  would  be  unworthy  of  the  United  States  if 
we  owned  the  country  through  which  the  canal  is  to  be  built. 

But  the  location  of  the  canal  belongs  to  other  governments,  from 
whom  we  must  obtain  any  right  to  construct  a  canal  on  their  terri- 
tory, and  it  is  not  unreasonable,  if  the  question  was  new  and  was 
not  involved  in  a  subsisting  treaty  with  Great  Britain,  that  she 
should  question  the  right  of  even  Nicaragua  and  Costa   Rica   to 


Speech  of  Elihu  Root  219 

grant  to  our  ships  of  commerce  and  of  war  extraordinary  privileges 
of  transit  through  the  canal. 

I  shall  revere  to  that  principle  declared  by  Senator  Davis. 
I  continue  the  quotation: 

It  is  not  reasonable  to  suppose  that  Nicaragua  and  Costa  Rica 
would  grant  to  the  United  States  the  exclusive  control  of  a  canal 
through  those  States  on  terms  less  generous  to  the  other  mari- 
time nations  than  those  prescribed  in  the  great  act  of  October  22, 
1888,  or  if  we  could  compel  them  to  give  us  such  advantages  over 
other  nations  it  would  not  be  creditable  to  our  country  to  accept 
them. 

That  our  Government  or  our  people  will  furnish  the  money  to 
build  the  canal  presents  the  single  question  whether  it  is  profitable 
to  do  so.  If  the  canal,  as  property,  is  worth  more  than  its  cost, 
we  are  not  called  on  to  divide  the  profits  with  other  nations.  If 
it  is  worth  less  and  we  are  compelled  by  national  necessities  to 
build  the  canal,  we  have  no  right  to  call  on  other  nations  to  make 
up  the  loss  to  us.  In  any  view,  it  is  a  venture  that  we  will  enter 
upon  if  it  is  to  our  interest,  and  if  it  is  otherwise  we  will  with- 
draw from  its  further  consideration. 

The  Suez  Canal  makes  no  discrimination  in  its  tolls  in  favor  of 
its  stockholders,  and,  taking  its  profits  or  the  half  of  them  as  our 
basis  of  calculation,  we  will  never  find  it  necessary  to  differentiate 
our  rates  of  toll  in  favor  of  our  own  people  in  order  to  secure  a 
very  great  profit  on  the  investment. 

Mr.  President,  in  view  of  that  declaration  of  principle,  in 
the  face  of  that  declaration,  the  United  States  can  not  afford 
to  take  a  position  at  variance  with  the  rule  of  universal  equal- 
ity established  by  the  Suez  Canal  convention — equality  as  to 
every  stockholder  and  all  nonstockholders,  equality  as  to 
every  nation  whether  in  possession  or  out  of  possession.  In 
the  face  of  that  declaration  the  United  States  can  not  afford 
to  take  any  other  position  than  upon  the  rule  of  universal 
equality  of  the  Suez  Canal  Convention,  and  upon  the  further 
declaration  that  the  country  owning  the  territory  through 
which  this  canal  was  to  be  built  would  not  and  ought  not  to 
give  any  special  advantage  or  preference  to  the  United  States 
as  compared  with  all  the  other  nations  of  the  earth.  In  view 
of  that  report  the  Senate  rejected  the  amendment  which  was 


220  Speech  of  Elihu  Eoot 

offered  by  Senator  Bard,  of  California,  providing  for  prefer- 
ence to  the  coastwise  trade  of  the  United  States.  This  is  the 
amendment  which  was  proposed: 

The  United  States  reserves  the  right  in  the  regulation  and  man- 
agement of  the  canal  to  discriminate  in  respect  of  the  charges  of 
traffic  in  favor  of  vessels  of  its  own  citizens  engaged  in  the  coast- 
wise trade. 

)I  say,  the  Senate  rejected  that  amendment  npon  this  report, 
which  declared  the  rule  of  universal  equality  without  any 
preference  or  discrimination  in  favor  of  the  United  States  as 
being  the  meaning  of  the  treaty  and  the  necessary  meaning 
of  the  treaty. 

There  was  still  more  before  the  Senate,  there  was  still 
more  before  the  country  to  fix  the  meaning  of  the  treaty.  I 
have  read  the  representations  that  were  made,  the  solemn  dec- 
larations made  by  the  United  States  to  Great  Britain  estab- 
lishing the  rule  of  absolute  equality  without  discrimination 
in  favor  of  the  United  States  or  its  citizens  to  induce  Great 
Britain  to  enter  into  the  Clayton-Bulwer  Treaty. 

Now,  let  me  read  the  declaration  made  to  Great  Britain  to 
induce  her  to  modify  the  Clayton-Bulwer  treaty  and  give  up 
her  right  to  joint  control  of  the  canal  and  put  in  our  hands 
the  sole  power  to  construct  it  or  patronize  it  or  control  it. 

Mr.  Blaine  said  in  his  instructions  to  Mr.  Lowell  on  June 
24,  1881,  directing  Mr.  Lowell  to  propose  to  Great  Britain 
the  modification  of  the  Clayton-Bulwer  Treaty : 

I  read  his  words: 

The  United  States  recognizes  a  proper  guarantee  of  neutrality  as 
essential  to  the  construction  and  successful  operation  of  any  high- 
way across  the  Isthmus  of  Panama,  and  in  the  last  generation 
every  step  was  taken  by  this  Government  that  is  deemed  requisite 
in  the  premises.  The  necessity  was  foreseen  and  abundantly  pro- 
vided for  long  in  advance  of  any  possible  call  for  the  actual  exer- 
cise of  power.  *  *  *  Nor,  in  time  of  peace,  does  the  United 
States  seek  to  have  any  exclusive  privileges  accorded  to  American 
ships  in  respect  to  precedence  or  tolls  through  an  interoceanic  canal 
any  more  than  it  has  sought  like  privileges  for  American  goods  in 
transit  over  the  Panama  Railway,  under  the  exclusive  control  of 


Speech  of  Elihu  Boot  221 

an  American  corporation.  The  extent  of  the  privileges  of  Amer- 
ican citizens  and  ships  is  measurable  under  the  treaty  of  1846  by 
those  of  Colombian  citizens  and  ships.  It  would  be  our  earnest 
desire  and  expectation  to  see  the  world's  peaceful  commerce  enjoy 
the  same  just,  liberal,  and  rational  treatment. 

Secretary  Cass  had  already  said  to  Great  Britain  in 
1857: 

The  United  States,  as  I  have  before  had  occasion  to  assure  your 
Lordship,  demand  no  exclusive  privileges  in  these  passages,  but  will 
always  exert  their  influence  to  secure  their  free  and  unrestricted 
benefits,  both  in  peace  and  war,  to  the  commerce  of  the  world. 

Mr.  President,  it  was  upon  that  declaration,  upon  that  self- 
denying  declaration,  upon  that  solemn  assurance,  that  the 
United  States  sought  not  and  would  not  have  any  preference 
for  its  own  citizens  over  the  subjects  and  citizens  of  other 
countries  that  Great  Britain  abandoned  her  rights  under  the 
Clayton-Bulwer  Treaty  and  entered  into  the  Hay-Pauncefote 
Treaty,  with  the  clause  continuing  the  principles  of  clause  8, 
which  embodied  these  same  declarations,  and  the  clause  estab- 
lishing the  rule  of  equality  taken  from  the  Suez  Canal  con- 
vention. We  are  not  at  liberty  to  give  any  other  construction 
to  the  Hay-Pauncefote  treaty  than  the  construction  which  is 
consistent  with  that  declaration. 

Mr.  President,  these  declarations,  made  specifically  and  di- 
rectly to  secure  the  making  of  these  treaties,  do  not  stand 
alone.  For  a  longer  period  than  the  oldest  Senator  has  lived 
the  United  States  has  been  from  time  to  time  making  open 
and  public  declarations  of  her  disinterestedness,  her  altruism, 
her  purposes  for  the  benefit  of  mankind,  her  freedom  from 
desire  or  willingness  to  secure  special  and  peculiar  advantage 
in  respect  of  transit  across  the  Isthmus.  In  1826  Mr.  Clay, 
then  Secretary  of  State  in  the  Cabinet  of  John  Quincy 
Adams,  said,  in  his  instructions  to  the  delegates  to  the  Pan- 
ama Congress  of  that  year: 

If  a  canal  across  the  Isthmus  be  opened  "so  as  to  admit  of  the 
passage  of  sea  vessels  from  ocean  to  ocean,  the  benefit  of  it  ought 


222  Speech  of  Elihu  Eoot 

not  to  be  exclusively  appropriated  to  any  one  nation,  but  should 
be  extended  to  all  parts  of  the  globe  upon  the  payment  of  a  just 
compensation  for  reasonable  tolls." 

Mr.  Cleveland,  in  his  annual  message  of  1885,  said: 

The  lapse  of  years  has  abundantly  confirmed  the  wisdom  and 
foresight  of  those  earlier  administrations  which,  long  before  the 
conditions  of  maritime  intercourse  were  changed  and  enlarged  by 
the  progress  of  the  age,  proclaimed  the  vital  need  of  interoceanic 
transit  across  the  American  Isthmus  and  consecrated  it  in  advance 
to  the  common  use  of  mankind  by  their  positive  declarations  and 
through  the  formal  obligations  of  treaties.  Toward  such  realiza- 
tion the  efforts  of  my  administration  will  be  applied,  ever  bearing 
in  mind  the  principles  on  which  it  must  rest  and  which  were  de- 
clared in  no  uncertain  tones  by  Mr.  Cass,  who,  while  Secretary  of 
State  in  1858,  announced  that  "What  the  United  States  want  in 
Central  America  next  to  the  happiness  of  its  people  is  the  security 
and  neutrality  of  the  interoceanic  routes  which  lead  through  it." 

By  public  declarations,  by  the  solemn  asseverations  of  our 
treaties  with  Colombia  in  1846,  with  Great  Britain  in  1850, 
our  treaties  with  Nicaragua,  our  treaty  with  Great  Britain  in 
1901,  our  treaty  with  Panama  in  1903,  we  have  presented  to 
the  world  the  most  unequivocal  guaranty  of  disinterested 
action  for  the  common  benefit  of  mankind  and  not  for  our 
selfish  advantage. 

In  the  message  which  was  sent  to  Congress  by  President 
Roosevelt  on  the  4th  of  January,  1904,  explaining  the  course 
of  this  Government  regarding  the  revolution  in  Panama  and 
the  making  of  the  treaty  by  which  we  acquired  all  the  title 
that  we  have  upon  the  Isthmus,  President  Roosevelt  said: 

If  ever  a  Government  could  be  said  to  have  received  a  mandate 
from  civilization  to  effect  an  object  the  accomplishment  of  which 
was  demanded  in  the  interest  of  mankind,  the  United  States  holds 
that  position  with  regard  to  the  interoceanic  canal. 

Mr.  President,  there  has  been  much  discussion  for  many 
years  among  authorities  upon  international  law  as  to  whether 
artificial  canals  for  the  convenience  of  commerce  did  not  par- 
take of  the  character  of  natural  passageways  to  such  a  degree 
that,  by  the  rules  of  international  law,  equality  must  be  ob- 


Speech  of  Elihu  Root  223 

served  in  the  treatment  of  mankind  by  the  nation  which  has 
possession  and  control.  Many  very  high  authorities  have  as- 
serted that  that  rule  applies  to  the  Panama  Canal  even  with- 
out a  treaty.  We  base  our  title  upon  the  right  of  mankind 
in  the  Isthmus,  treaty  or  no  treaty.  We  have  long  asserted, 
beginning  with  Secretary  Cass,  that  the  nations  of  Central 
America  had  no  right  to  debar  the  world  from  its  right  of 
passage  across  the  Isthmus.  Upon  that  view,  in  the  words 
which  I  have  quoted  from  President  Roosevelt's  message  to 
Congress,  we  base  the  justice  of  our  entire  action  upon  the 
Isthmus  which  resulted  in  our  having  the  Canal  Zone.  We 
could  not  have  taken  it  for  our  selfish  interest;  we  could  not 
have  taken  it  for  the  purpose  of  securing  an  advantage  to  the 
people  of  the  United  States  over  the  other  peoples  of  the 
world;  it  was  only  because  civilization  had  its  rights  to  pas- 
sage across  the  Isthmus  and  because  we  made  ourselves  the 
mandatory  of  civilization  to  assert  those  rights  that  we  are 
entitled  to  be  there  at  all.  On  the  principles  which  underlie 
our  action  and  upon  all  the  declarations  that  we  have  made 
for  more  than  half  a  century,  as  well  as  upon  the  express 
and  positive  stipulations  of  our  treaties,  we  are  forbidden  to 
say  we  have  taken  the  custody  of  the  Canal  Zone  to  give  our- 
selves any  right  of  preference  over  the  other  civilized  nations 
of  the  world  beyond  those  rights  which  go  to  the  owner  of  a 
canal  to  have  the  tolls  that  are  charged  for  passage. 

Well,  Mr.  President,  asserting  that  we  were  acting  for  the 
common  benefit  of  mankind,  willing  to  accept  no  preferential 
right  of  our  own,  just  as  we  asserted  it  to  secure  the  Clayton- 
Bulwer  treaty,  just  as  we  asserted  it  to  secure  the  Hay- 
Pauncefote  treaty,  when  we  had  recognized  the  Republic  of 
Panama,  we  made  a  treaty  with  her  on  the  18th  of  November, 
1903.  il  ask  your  attention  now  to  the  provisions  of  that 
treaty.  In  that  treaty  both  Panama  and  the  United  States 
recognize  the  fact  that  the  United  States  was  acting,  not  for 
its  own  special  and  selfish  interest,  but  in  the  interest  of  man- 
kind. 


224  Speech  of  Elihu  Eoot 

The  suggestion  has  been  made  that  we  are  relieved  from 
the  obligations  of  our  treaties  with  Great  Britain  because  the 
Canal  Zone  is  our  territory.  It  is  said  that,  because  it  has 
become  ours,  we  are  entitled  to  build  the  canal  on  our  own 
territory  and  do  what  we  please  with  it.  Nothing  can 
be  further  from  the  fact.  It  is  not  our  territory,  except  in 
trust.     Article  2  of  the  treaty  with  Panama  provides: 

The  Republic  of  Panama  grants  to  the  United  States  in  perpetu- 
ity the  use,  occupation,  and  control  of  a  zone  of  land  and  land 
under  water  for  the  construction,  maintenance,  operation,  sanita- 
tion, and  protection  of  said  canal — 

And  for  no  other  purpose — 

of  the  width  of  10  miles  extending  to  the  distance  of  5  miles  on 
each  side  of  the  center  line  of  the  route  of  the  canal  to  be  con- 
structed. 

********* 

The  Republic  of  Panama  further  grants  to  the  United  States  in 
perpetuity  the  use,  occupation,  and  control  of  any  other  lands  and 
waters  outside  of  the  zone  above  described  which  may  be  necessary 
and  convenient  for  the  construction,  maintenance,  operation,  sanita- 
tion, and  protection  of  the  said  canal  or  of  any  auxiliary  canals 
or  other  works  necessary  and  convenient  for  the  construction, 
maintenance,  operation,  sanitation,  and  protection  of  the  said  enter- 
prise. 

Article  3  provides: 

The  Republic  of  Panama  grants  to  the  United  States  all  the 
rights,  power,  and  authority  within  the  zone  mentioned  and  de- 
scribed in  article  2  of  this  agreement — 

From  which  I  have  just  read — 

and  within  the  limits  of  all  auxiliary  lands  and  waters  mentioned 
and  described  in  said  article  2  which  the  United  States  would  pos- 
sess and  exercise  if  it  were  the  sovereign  of  the  territory  within 
which  said  lands  and  waters  are  located  to  the  entire  exclusion  of 
the  exercise  by  the  Republic  of  Panama  of  any  such  sovereign 
rights,  power,  or  authority. 

Article  5  provides: 

The  Republic  of  Panama  grants  to  the  United  States  in  perpetu- 


Speech  of  Elihu  Eoot  225 

ity  a  monopoly  for  the  construction,  maintenance,  and  operation  of 
any  system  of  communication  by  means  of  canal  or  railroad  across 
its  territory  between  the  Caribbean  Sea  and  the  Pacific  Ocean. 

I  now  read  from  article  18: 

The  canal,  when  constructed,  and  the  entrances  thereto  shall  be 
neutral  in  perpetuity,  and  shall  be  opened  upon  the  terms  provided 
for  by  section  1  of  article  3  of,  and  in  conformity  with  all  the 
stipulations  of,  the  treaty  entered  into  by  the  Governments  of  the 
United  States  and  Great  Britain  on  November  18,  1901. 

So,  Mr.  President,  far  from  our  being  relieved  of  the  obli- 
gations of  the  treaty  with  Great  Britain  by  reason  of  the  title 
that  we  have  obtained  to  the  Canal  Zone,  we  have  taken  that 
title  impressed  with  a  solemn  trust.  We  have  taken  it  for 
no  purpose  except  the  construction  and  maintenance  of  a 
canal  in  accordance  with  all  the  stipulations  of  our  treaty 
with  Great  Britain.  We  can  not  be  false  to  those  stipula- 
tions without  adding  to  the  breach  of  contract  a  breach  of 
the  trust  which  we  have  assumed,  according  to  our  own  dec- 
larations, for  the  benefit  of  mankind  as  the  mandatory  of  civ- 
ilization. 

In  anticipation  of  the  plainly-to-be-foreseen  contingency 
of  our  having  to  acquire  some  kind  of  title  in  order  to  con- 
struct the  canal,  the  Hay-Pauncefote  treaty  provided  ex- 
pressly in  article  4: 

It  is  agreed  that  no  change  of  territorial  sovereignty  or  of  inter- 
national relations  of  the  country  or  countries  traversed  by  the  be- 
forementioned .  canal  shall  affect  the  general  principle  of  neutraliza- 
tion or  the  obligation  of  the  high  contracting  parties  under  the 
present  treaty. 

So  you  will  see  that  the  treaty  with  Great  Britain  expressly 
provides  that  its  obligations  shall  continue,  no  matter  what 
title  we  get  to  the  Canal  Zone;  and  the  treaty  by  which  we 
get  the  title  expressly  impresses  upon  it  as  a  trust  the  obliga- 
tions of  the  treaty  with  Great  Britain.  How  idle  it  is  to  say 
that  because  the  Canal  Zone  is  ours  we  can  do  with  it  what 
we  please. 


226  Speech  of  Elihu  Root 

There  is  another  suggestion  made  regarding  the  obligations 
of  this  treaty,  and  that  is  that  matters  relating  to  the  coasting 
trade  are  matters  of  special  domestic  concern,  and  that  no- 
body else  has  any  right  to  say  anything  about  them.  We  did 
not  think  so  when  we  were  dealing  with  the  Canadian  canals. 
But  that  may  not  be  conclusive  as  to  rights  under  this  treaty. 
But  examine  it  for  a  moment. 

It  is  rather  poverty  of  language  than  a  genius  for  definition 
which  leads  us  to  call  a  voyage  from  New  York  to  San  Fran- 
cisco, passing  along  countries  thousands  of  miles  away  from 
our  territory,  "coasting  trade,"  or  to  call  a  voyage  from  New 
York  to  Manila,  on  the  other  side  of  the  world,  "coasting 
trade."  When  we  use  the  term  "coasting  trade"  what  we 
really  mean  is  that  under  our  navigation  laws  a  voyage  which 
begins  and  ends  at  an  American  port  has  certain  privileges 
and  immunities  and  rights,  and  it  is  necessarily  in  that  sense 
that  the  term  is  used  in  this  statute.  It  must  be  construed  in 
accordance  with  our  statutes. 

Sir,  I  do  not  for  a  moment  dispute  that  ordinary  coasting 
trade  is  a  special  kind  of  trade  that  is  entitled  to  be  treated 
differently  from  trade  to  or  from  distant  foreign  points. 
It  is  ordinarily  neighborhood  trade,  from  port  to  port,  by 
which  the  people  of  a  country  carry  on  their  intercommunica- 
tion, often  by  small  vessels,  poor  vessels,  carrying  cargoes  of 
slight  value.  It  would  be  quite  impracticable  to  impose 
upon  trade  of  that  kind  the  same  kind  of  burdens  which  great 
ocean-going  steamers,  trading  to  the  farthest  parts  of  the 
earth,  can  well  bear.  We  make  that  distinction.  Indeed, 
Great  Britain  herself  makes  it,  although  Great  Britain  admits 
all  the  world  to  her  coasting  trade.  But  it  is  by  quite  a  dif- 
ferent basis  of  classification — that  is,  the  statutory  basis — 
that  we  call  a  voyage  from  the  eastern  coast  of  the  United 
States  to  the  Orient  a  coasting  voyage,  because  it  begins  and 
ends  in  an  American  port. 

This  is  a  special,  peculiar  kind  of  trade  which  passes 
through    the    Panama    Canal.    You    may    call    it    "coasting 


/ 


Speech  of  Elihu  Eoot  227 

trade,"  but  it  is  unlike  any  other  coasting  trade.  It  is  spe- 
cial and  peculiar  to  itself. 

Grant  that  we  are  entitled  to  fix  a  different  rate  of  tolls  for 
that  class  of  trade  from  that  which  would  be  fixed  for  other 
classes  of  trade.  Ah,  yes;  but  Great  Britain  has  her  coasting 
trade  through  the  canal  under  the  same  definition,  and  Mexico 
has  her  coasting  trade,  and  Germany  has  her  coasting  trade, 
and  Colombia  has  her  coasting  trade,  in  the  same  sense  that  we 
have.  You  are  not  at  liberty  to  discriminate  in  fixing  tolls 
between  a  voyage  from  Portland,  Me.,  to  Portland,  Oreg.,  by 
an  American  ship,  and  a  voyage  from  Halifax  to  Victoria 
in  a  British  ship,  or  a  voyage  from  Vera  Cruz  to  Acapulco 
in  a  Mexican  ship,  because  when  you  do  so  you  discriminate, 
not  between  coasting  trade  and  other  trade,  but  between 
American  ships  and  British  ships,  Mexican  ships,  or  Colom- 
bian ships.  That  is  a  violation  of  the  rule  of  equality  which 
we  have  solemnly  adopted,  and  asserted  and  reasserted,  and 
to  which  we  are  bound  by  every  consideration  of  honor 
and  good  faith.  Whatever  this  treaty  means,  it  means 
for  that  kind  of  trade  as  well  as  for  any  other  kind  of 
trade. 

The  suggestion  has  been  made,  also,  that  we  should  not  con- 
sider that  the  provision  in  this  treaty  about  equality  as  to 
tolls  really  means  what  it  says,  because  it  is  not  to  be  sup- 
posed that  the  United  States  would  give  up  the  right  to  defend 
itself,  to  protect  its  own  territory,  to  land  its  own  troops,  and 
to  send  through  the  canal  as  it  pleases  its  own  ships  of  war. 
That  is  disposed  of  by  the  considerations  which  were  pre- 
sented to  the  Senate  in  the  Davis  report,  to  which  I  have  al- 
ready referred,  in  regard  to  the  Suez  convention. 

The  Suez  convention,  from  which  these  rules  of  the  Hay- 
Pauncefote  treaty  were  taken  almost — though  not  quite — tex- 
tual ly,  contained  other  provisions  which  reserved  to  Turkey 
and  to  Egypt,  as  sovereigns  of  the  territory  through  which 
the  canal  passed — Egypt  as  the  sovereign  and  Turkey  as  the 
sovereign  over  Egypt — all  of  the  rights  that  pertained  to  sov- 


228  Speech  of  Elihu  Eoot 

ereigns  for  the  protection  of  their  own  territory.  As  when 
the  Hay-Pauncefote  treaty  was  made  neither  party  to  the 
treaty  had  any  title  to  the  region  which  would  be  trav- 
ersed by  the  canal,  no  such  clauses  could  be  introduced. 
But,  as  was  pointed  out,  the  rules  which  were  taken  from  the 
Suez  Canal  for  the  control  of  the  canal  management  would 
necessarily  be  subject  to  these  rights  of  sovereignty  which  were 
still  to  be  secured  from  the  countries  owning  the  territory. 
That  is  recognized  by  the  British  Government  in  the  note 
which  has  been  sent  to  us  and  has  been  laid  before  the  Senate, 
or  is  in  the  possession  of  the  Senate,  from  the  British  foreign 
office. 

In  Sir  Edward  Grey's  note  of  November  14,  1912,  he  says 
what  I  am  about  to  read.  This  is  an  explicit  disclaimer  of 
any  contention  that  the  provisions  of  the  Hay-Pauncefote 
treaty  exclude  us  from  the  same  rights  of  protection  of  ter- 
ritory which  Nicaragua  or  Colombia  or  Panama  would  have 
had  as  sovereigns,  and  which  we  succeed  to,  pro  tanto,  by  vir- 
tue of  the  Panama  Canal  treaty. 

Sir  Edward  Grey  says: 

I  notice  that  in  the  course  of  the  debate  in  the  Senate  on  the 
Panama  Canal  bill  the  argument  was  used  by  one  of  the  speakers 
that  the  third,  fourth,  and  fifth  rules  embodied  in  article  3  of  the 
treaty  show  that  the  words  "all  nations"  can  not  include  the  United 
States,  because,  if  the  United  States  were  at  war,  it  is  impossible 
to  believe  that  it  could  be  intended  to  be  debarred  by  the  treaty 
from  using  its  own  territory  for  revictualing  its  warships  or  land- 
ing troops. 

The  same  point  may  strike  others  who  read  nothing  but  the  text 
of  the  Hay-Pauncefote  treaty  itself,  and  I  think  it  is  therefore 
worth  while  that  I  should  briefly  show  that  this  argument  is  not 
well  founded. 

I  read  this  not  as  an  argument  but  because  it  is  a  formal, 
official  disclaimer  which  is  binding. 
Sir  Edward  Grey  proceeds: 

The  Hay-Pauncefote  treaty  of  1901  aimed  at  carrying  out  the 
principle  of  the  neutralization  of  the  Panama  Canal  by  subjecting 
it  to  the  same  regime  as  the  Suez  Canal.     Rules  3,  4,  and  5  of 


Speech  of  Elihu  Eoot  229 

article  3  of  the  treaty  are  taken  almost  textually  from  articles  4, 
5,  and  6  of  the  Suez  Canal  Convention  of  1888.  At  the  date  of 
the  signature  of  the  Hay-Pauncefote  treaty  the  territory  on  which 
the  Isthmian  Canal  was  to  be  constructed  did  not  belong  to  the 
United  States,  consequently  there  was  no  need  to  insert  in  the 
draft  treaty  provisions  corresponding  to  those  in  articles  10  and  13 
of  the  Suez  Canal  Convention,  which  preserve  the  sovereign  rights 
of  Turkey  and  of  Egypt,  and  stipulate  that  articles  4  and  5  shall 
not  affect  the  right  of  Turkey,  as  the  local  sovereign,  and  of  Egypt, 
within  the  measure  of  her  autonomy,  to  take  such  measures  as 
may  be  necessary  for  securing  the  defense  of  Egypt  and  the  main- 
tenance of  public  order,  and,  in  the  case  of  Turkey,  the  defense  of 
her  possessions  on  the  Red  Sea. 

Now  that  the  United  States  has  become  the  practical  sovereign 
of  the  canal,  His  Majesty's  Government  do  not  question  its  title  to 
exercise  belligerent  rights  for  its  protection. 

Mr.  President,  Great  Britain  has  asserted  the  construction  of 
the  Hay-Pauncefote  treaty  of  1901,  the  arguments  for  which 
I  have  been  stating  to  the  Senate.  I  realize,  sir,  that  I  may  be 
wrong.  I  have  often  been  wrong.  I  realize  that  the  gentle- 
men who  have  taken  a  different  view  regarding  the  meaning  of 
this  treaty  may  be  right.  I  do  not  think  so.  But  their  ability 
and  fairness  of  mind  would  make  it  idle  for  me  not  to  entertain 
the  possibility  that  they  are  right  and  I  am  wrong.  Yet,  Mr. 
President,  the  question  whether  they  are  right  and  I  am  wrong 
depends  upon  the  interpretation  of  the  treaty.  It  depends 
upon  the  interpretation  of  the  treaty  in  the  light  of  all  the 
declarations  that  have  been  made  by  the  parties  to  it,  in  the 
light  of  the  nature  of  the  subject  matter  with  which  it  deals. 

Gentlemen  say  the  question  of 'imposing  tolls  or  not  im- 
posing tolls  upon  our  coastwise  commerce  is  a  matter  of  our 
concern.  Ah!  we  have  made  a  treaty  about  it.  If  the  inter- 
pretation of  the  treaty  is  as  England  claims,  then  it  is  not  a 
matter  of  our  concern;  it  is  a  matter  of  treaty  rights  and 
duties.  But,  sir,  it  is  not  a  question  as  to  our  rights  to  remit 
tolls  to  our  commerce.  It  is  a  question  whether  we  can  im- 
pose tolls  upon  British  commerce  when  we  have  remitted  them 
from  our  own.  That  is  the  question.  Nobody  disputes  our 
right  to  allow  our  own  ships  to  go  through  the  canal  without 
paying  tolls.    What  is  disputed  is  our  right  to  charge  tolls 


230  Speech  of  Elihu  Eoot 

against  other  ships  when  we  do  not  charge  them  against  our 
own.  That  is,  pure  and  simple,  a  question  of  international 
right  and  duty,  and  depends  upon  the  interpretation  of  the 
treaty. 

Sir,  we  have  another  treaty,  made  between  the  United 
States  and  Great  Britain  on  the  4th  of  April,  1908,  in  which 
the  two  nations  have  agreed  as  follows: 

Differences  which  may  arise  of  a  legal  nature  or  relating  to  the 
interpretation  of  treaties  existing  between  the  two  contracting 
parties  and  which  it  may  not  have  been  possible  to  settle  by 
diplomacy,  shall  be  referred  to  the  Permanent  Court  of  Arbitration 
established  at  The  Hague  by  the  convention  of  the  20th  of  July, 
1890,  provided,  nevertheless,  that  they  do  not  affect  the  vital  in- 
terests, the  independence,  or  the  honor  of  the  two  contracting 
States,  and  do  not  concern  the  interests  of  third  parties. 

Of  course,  the  question  of  the  rate  of  tolls  on  the  Panama 
Canal  does  not  affect  any  nation's  vital  interests.  It  does  not 
affect  the  independence  or  the  honor  of  either  of  these  con- 
tracting States.  We  have  a  difference  relating  to  the  inter- 
pretation of  this  treaty,  and  that  is  all  there  is  to  it.  We  are 
bound,  by  this  treaty  of  arbitration,  not  to  stand  with  arro^ 
pant  assertion  upon  our  own  Government's  opinion  as  to  the 
interpretation  of  the  treaty,  not  to  require  that  Great  Britain 
shall  suffer  what  she  deems  injustice  by  violation  of  the  treaty, 
or  else  go  to  war.  We  are  bound  to  say,  "We  keep  the  faith  of 
our  treaty  of  arbitration,  and  we  will  submit  the  question  as 
to  what  this  treaty  means  to  an  impartial  tribunal  of  arbitra- 
tion." 

Mr.  President,  if  we  stand  in  the  position  of  arrogant  re- 
fusal to  submit  the  questions  arising  upon  the  interpretation 
of  this  treaty  to  arbitration,  we  shall  not  only  violate  our 
solemn  obligation,  but  we  shall  be  false  to  all  the  principles 
that  we  have  asserted  to  the  world,  and  that  we  have  urged 
upon  mankind.  We  have  been  the  apostle  of  arbitration. 
We  have  been  urging  it  upon  the  other  civilized  nations. 
Presidents,  Secretaries  of  State,  ambassadors,  and  ministers — 
aye,  Congresses,  the  Senate  and  the  House,  all  branches  of  our 


Speech  of  Elihu  Eoot  231 

Government  have  committed  the  United  States  to  the  principle 
of  arbitration  irrevocably,  unequivocally,  and  we  have  urged  it 
in  season  and  out  of  season  on  the  rest  of  mankind. 

Sir,  I  can  not  detain  the  Senate  by  more  than  beginning 
upon  the  expressions  that  have  come  from  our  Government 
upon  this  subject,  but  I  will  ask  your  indulgence  while  I  call 
your  attention  to  a  few  selected  from  the  others. 

On  the  9th  of  June,  1874,  the  Senate  Committee  on  Foreign 
Relations  reported  and  the  Senate  adopted  this  resolution : 

Resolved,  That  the  United  States  having  at  heart  the  cause  of 
peace  everywhere,  and  hoping  to  help  its  permanent  establishment 
between  nations,  hereby  recommend  the  adoption  of  arbitration  as 
a  great  and  practical  method  for  the  determination  of  international 
difference,  to  be  maintained  sincerely  and  in  good  faith,  so  that 
war  may  cease  to  be  regarded  as  a  proper  form  of  trial  between 
nations. 

On  the  17th  of  June,  1874,  the  Committee  on  Foreign  Af- 
fairs of  the  House  adopted  this  resolution : 

Whereas  war  is  at  all  times  destructive  of  the  material  interests 
of  a  people,  demoralizing  in  its  tendencies,  and  at  variance  with 
an  enlightened  public  sentiment ;  and  whereas  differences  between 
nations  should  in  the  interests  of  humanity  and   fraternity   be 
adjusted,  if  possible,  by  international  arbitration:     Therefore, 
Resolved,  That  the  people  of  the  United  States  being  devoted  to 
the  policy  of  peace  with  all  mankind,  enjoining  its  blessings  and 
hoping    for    its    permanence    and    its    universal    adoption,    hereby 
through  their  representatives  in  Congress  recommend  such  arbitra- 
tion as  a  rational  substitute  for  war ;  and  they  further  recommend 
to  the  treaty-making  power  of  the  Government  to  provide,  if  prac- 
ticable, that  hereafter  in  treaties  made  between  the  United  States 
and   foreign   powers   war  shall  not  be   declared  by   either   of   the 
contracting  parties  against  the  other  until  efforts  shall  have  been 
made  to  adjust  all  alleged  cause  of  difference  by  impartial  arbitra- 
tion. 

On  the  same  17th  of  June,  1874,  the  Senate  adopted  this 
resolution : 

Resolved,  etc.,  That  the  President  of  the  United  States  is  hereby 
authorized  and  requested  to  negotiate  with  all  civilized  powers  who 
may  be  willing  to  enter  into  surli  negotiations  for  the  establishment 
of  an  international  system   whereby  matters  in   dispute  between 


232  Speech  of  Elihu  Eoot 

different  Governments  agreeing  thereto  may  be  adjusted  by  arbi- 
tration, and,  if  possible,  without  recourse  to  war. 

On  the  14th  of  June,  1888,  and  again  on  the  14th  of  Febru- 
ary, 1890,  the  Senate  and  the  House  adopted  a  concurrent 
resolution  in  the  words  which  I  now  read: 

Resolved  by  the  Senate  (the  House  of  Representatives  concur- 
ring), That  the  President  be,  and  is  hereby,  requested  to  invite, 
from  time  to  time,  as  fit  occasions  may  arise,  negotiations  with 
any  Government  with  which  the  United  States  has,  or  may  have, 
diplomatic  relations,  to  the  end  that  any  differences  or  disputes 
arising  between  the  two  Governments  which  can  not  be  adjusted 
by  diplomatic  agency  may  be  referred  to  arbitration  and  be  peace- 
ably adjusted  by  such  means. 

This  was  concurred  in  by  the  House  on  the  3d  of  April, 
1890. 

Mr.  President,  in  pursuance  of  those  declarations  by  both 
Houses  of  Congress  the  Presidents  and  the  Secretaries  of 
State  and  the  diplomatic  agents  of  the  United  States,  doing 
their  bounden  duty,  have  been  urging  arbitration  upon  the 
people  of  the  world.  Our  representatives  in  The  Hague  con- 
ference of  1899,  and  in  The  Hague  conference  of  1907,  and  in 
the  Pan  American  conference  in  Washington,  and  in  the  Pan 
American  conference  in  Mexico,  and  in  the  Pan  American  con- 
ference in  Rio  de  Janeiro  were  instructed  to  urge  and  did 
urge  and  pledge  the  United  States  in  the  most  unequivocal 
and  urgent  terms  to  support  the  principle  of  arbitration  upon 
all  questions  capable  of  being  submitted  to  a  tribunal  for  a 
decision. 

Under  those  instructions  Mr.  Hay  addressed  the  people  of 
the  entire  civilized  world  with  the  request  to  come  into  treaties 
of  arbitration  with  the  United  States.  Here  was  his  letter. 
After  quoting  from  the  resolutions  and  from  expressions  by 
the  President  he  said: 

Moved  by  these  views,  the  President  has  charged  me  to  instruct 
you  to  ascertain  whether  the  Government  to  which  you  are  ac- 
credited, which  he  has  reason  to  believe  is  equally  desirous  of  ad- 
vancing  the   principle   of   international   arbitration,    is   willing   to 


Speech  of  Elihu  Eoot  233 

conclude  with  the  Government  of  the  United  States  an  arbitration 
treaty  of  like  tenor  to  the  arrangement  concluded  between  France 
and  Great  Britain  on  October  14,  1903. 

That  was  the  origin  of  this  treaty.  The  treaties  made  by 
Mr.  Hay  were  not  satisfactory  to  the  Senate  because  of  the 
question  about  the  participation  of  the  Senate  in  the  make-up 
of  the  special  agreement  of  submission.  Mr.  Hay's  successor 
modified  that  on  conference  with  the  Committee  on  Foreign 
Relations  of  the  Senate,  and  secured  the  assent  of  the  other 
countries  of  the  world  to  the  treaty  with  that  modification. 
We  have  made  25  of  these  treaties  of  arbitration,  covering  the 
greater  part  of  the  world,  under  the  direction  of  the  Senate 
of  the  United  States  and  the  House  of  Representatives  of  the 
United  States  and  in  accordance  with  the  traditional  policy 
of  the  United  States,  holding  up  to  the  world  the  principle 
of  peaceful  arbitration. 

One  of  these  treaties  is  here,  and  under  it  Great  Britain  is 
demanding  that  the  question  as  to  what  the  true  interpreta- 
tion of  our  treaty  about  the  canal  is  shall  be  submitted  to  deci- 
sion and  not  be  made  the  subject  of  war  or  of  submission  to 
what  she  deems  injustice  to  avoid  war. 

In  response  to  the  last  resolution  which  I  have  read,  the 
concurrent  resolution  passed  by  the  Senate  and  the  House 
requesting  the  President  to  enter  into  the  negotiations  which 
resulted  in  these  treaties  of  arbitration,  the  British  House  of 
Commons  passed  a  resolution  accepting  the  overture.  On  the 
16th  of  July,  1893,  the  House  of  Commons  adopted  this  reso- 
lution : 

Resolved,  That  this  house  has  learnt  with  satisfaction  that  both 
Houses  of  the  United  States  Congress  have,  by  resolution,  re- 
quested the  President  to  invite  from  time  to  time,  as  fit  occasions 
may  arise,  negotiations  with  any  government  with  which  the 
United  States  have  or  may  have  diplomatic  relations,  to  the  end 
that  any  differences  or  disputes  arising  between  the  two  govern- 
ments which  can  not  be  adjusted  by  diplomatic  agency  may  be 
referred  to  arbitration  and  peaceably  adjusted  by  such  means,  and 
that  this  house,  cordially  sympathizing  with  the  purpose  in  view, 
expresses  the  hope  that  Her  Majesty's  Government  will  lend  their 


234  Speech  of  Elihu  Eoot 

ready  cooperation  to  the  Government  of  the  United  States  upon 
the  basis  of  the  foregoing  resolution. 

Her  Majesty's  Government  did,  and  thence  came  this  treaty. 

Mr.  President,  what  revolting  hypocrisy  we  convict  ourselves 
of,  if  after  all  this,  the  first  time  there  comes  up  a  question 
in  which  we  have  an  interest,  the  first  time  there  comes  up  a 
question  of  difference  about  the  meaning  of  a  treaty  as  to 
which  we  fear  we  may  be  beaten  in  an  arbitration,  we  refuse 
to  keep  our  agreement  ?  Where  will  be  our  self-respect  if  we 
do  that  ?  Where  will  be  that  respect  to  which  a  great  nation  is 
entitled  from  the  other  nations  of  the  earth? 

I  have  read  from  what  Congress  has  said. 

Let  me  read  something  from  President  Grant's  annual  mes- 
sage of  December  4,  1871.  He  is  commenting  upon  the 
arbitration  provisions  of  the  treaty  of  1871,  in  which  Great 
Britain  submitted  to  arbitration  our  claims  against  her,  known 
as  the  Alabama  claims,  in  which  Great  Britain  submitted 
those  claims,  where  she  stood  possibly  to  lose  but  not  pos- 
sibly to  gain  anything,  and  submitted  them  against  the  most 
earnest  and  violent  protest  of  many  of  her  own  citizens.  Gen. 
Grant  said: 

The  year  has  been  an  eventful  one  in  witnessing  two  great  na- 
tions speaking  one  language  and  having  one  lineage,  settling  by 
peaceful  arbitration  disputes  of  long  standing  and  liable  at  any 
time  to  bring  those  nations  into  costly  and  bloody  conflict.  An 
example  has  been  set  which,  if  successful  in  its  final  issue,  may  be 
followed  by  other  civilized  nations  and  finally  be  the  means  of 
returning  to  productive  industry  millions  of  men  now  maintained 
to  settle  the  disputes  of  nations  by  the  bayonet  and  by  broadside. 

Under  the  authority  of  these  resolutions  our  delegates  in  the 
first  Pan  American  conference  at  Washington  secured  the 
adoption  of  this  resolution  April  18,  1890: 

Article  1.  The  Republics  of  North,  Central,  and  South  America 
hereby  adopt  arbitration  as  a  principle  of  American  international 
law  for  the  settlement  of  the  differences,  disputes,  or  controversies 
that  may  arise  between  two  or  more  of  them. 

And  this: 


Speech  of  Elihu  Root  235 

The  International  American  Conference  resolves  that  this  con- 
ference, having  recommended  arbitration  for  the  settlement  of  dis- 
putes among  the  Republics  of  America,  begs  leave  to  express  the 
wish  that  controversies  between  them  and  the  nations  of  Europe 
may  be  settled  in  the  same  friendly  manner. 

It  is  further  recommended  that  the  Government  of  each  nation 
herein  represented  communicate  this  wish  to  all  friendly  powers. 

Upon  that  Mr.  Blaine,  that  most  vigorous  and  virile  Amer- 
ican, in  his  address  as  the  presiding  officer  of  that  first  Pan 
American  conference  in  Washington  said: 

If,  in  this  closing  hour,  the  conference  had  but  one  deed  to  cele- 
brate we  should  dare  call  the  world's  attention  to  the  deliberate, 
confident,  solemn  dedication  of  two  great  continents  to  peace  and  to 
the  prosperity  which  has  peace  for  its  foundation.  We  hold  up 
this  new  Magna  Charta,  which  abolishes  war  and  substitutes  arbi- 
tration between  the  American  Republics,  as  the  first  and  great  fruit 
of  the  International  American  Conference.  That  noblest  of  Amer- 
icans, the  aged  poet  and  philanthropist,  Whittier,  is  the  first  to 
send  his  salutation  and  his  benediction,  declaring,  "If  in  the  spirit 
of  peace  the  American  conference  agrees  upon  a  rule  of  arbitration 
which  shall  make  war  in  this  hemisphere  well-nigh  impossible,  its 
sessions  will  prove  one  of  the  most  important  events  in  the  history 
of  the  world." 

President  Arthur  in  his  annual  message  of  December  4, 
1882,  said,  in  discussing  the  proposition  for  a  Pan  American 
conference : 

I  am  unwilling  to  dismiss  this  subject  without  assuring  you  of 
my  support  of  any  measure  the  wisdom  of  Congress  may  devise  for 
the  promotion  of  peace  on  this  continent  and  throughout  the  world, 
and  I  trust  the  time  is  nigh  when,  with  the  universal  assent  of 
civilized  peoples,  all  international  differences  shall  be  determined 
without  resort  to  arms  by  the  benignant  processes  of  arbitration. 

President  Harrison  in  his  message  of  December  3,  1889,  said 
concerning  the  Pan  American  conference: 

But  while  the  commercial  results  which  it  is  hoped  will  follow 
this  conference  are  worthy  of  pursuit  and  of  the  great  interests 
they  have  excited,  it  is  believed  that  the  crowning  benefit  will  be 
found  in  the  better  securities  which  may  be  devised  for  the  main- 
tenance of  peace  among  all  American  nations  and  the  settlement  of 
all  contentions  by  methods  that  a  Christian  civilization  can  ap- 
prove. 


236  Speech  of  Elihu  Eoot 

President  Cleveland,  in  his  message  of  December  4,  1893, 
said,  concerning  the  resolution  of  the  British  Parliament  of 
July  16,  1893,  which  I  have  already  read,  and  commenting 
on  the  concurrent  resolution  of  February  14  and  April  18, 
1890: 

It  affords  me  signal  pleasure  to  lay  this  parliamentary  resolu- 
tion before  the  Congress  and  to  express  my  sincere  gratification 
that  the  sentiment  of  two  great  kindred  nations  is  thus  authorita- 
tively manifested  in  favor  of  the  rational  and  peaceable  settlement 
of  international  quarrels  by  honorable  resort  to  arbitration. 

President  McKinley,  in  his  message  of  December  6,  1897, 
said: 

International  arbitration  can  not  be  omitted  from  the  list  of  sub- 
jects claiming  our  consideration.  Events  have  only  served  to 
strengthen  the  general  views  on  this  question  expressed  in  my  in- 
augural address.  The  best  sentiment  of  the  civilized  world  is 
moving  toward  the  settlement  of  differences  between  nations  with- 
out resorting  to  the  horrors  of  war.  Treaties  embodying  these 
humane  principles  on  broad  lines  without  in  any  way  imperiling 
our  interests  or  our  honor  shall  have  my  constant  encouragement. 

President  Roosevelt,  in  his  message  of  December  3,  1905, 
said: 

I  earnestly  hope  that  the  conference — 

The  second  Hague  conference — 

may  be  able  to  devise  some  way  to  make  arbitration  between 
nations'  the  customary  way  of  settling  international  disputes  in  all 
save  a  few  classes  of  cases,  which  should  themselves  be  sharply 
defined  and  rigidly  limited  as  the  present  governmental  and  social 
development  of  the  world  will  permit.  If  possible,  there  should  be 
a  general  arbitration  treaty  negotiated  among  all  nations  rep- 
resented at  the  conference. 

Oh,  Mr.  President,  are  we  Pharisees?  Have  we  been  insin- 
cere and  false?  Have  we  been  pretending  in  all  these  long 
years  of  resolution  and  declaration  and  proposal  and  urgency 
for  arbitration*?  Are  we  ready  now  to  admit  that  our  coun- 
try,  that   its    Congresses   and   its   Presidents,   have    all   been 


Speech  of  Elihu  Eoot  237 

guilty  of  false  pretense,  of  humbug,  of  talking  to  the  galler- 
ies, of  fine  words  to  secure  applause,  and  that  the  instant  we 
have  an  interest- we  are  ready  to  falsify  every  declaration, 
every  promise,  and  every  principle?  But  we  must  do  that  if 
we  arrogantly  insist  that  we  alone  will  determine  upon  the 
interpretation  of  this  treaty  and  will  refuse  to  abide  by  the 
agreement  of  our  treaty  of  arbitration. 

Mr.  President,  what  is  all  this  for*?  Is  the  game  worth 
the  candle?  Is  it  worth  while  to  put  ourselves  in  a  position 
and  to  remain  in  a  position  to  maintain  which  we  may  be  driven 
to  repudiate  our  principles,  our  professions,  and  our  agree- 
ments for  the  purpose  of  conferring  a  money  benefit — not 
very  great,  not  very  important,  but  a  money  benefit — at  the 
expense  of  the  Treasury  of  the  United  States,  upon  the  most 
highly  and  absolutely  protected  special  industry  in  the  United 
States'?  Is  it  worth  while?  We  refuse  to  help  our  foreign 
shipping,  which  is  in  competition  with  the  lower  wages  and 
the  lower  standard  of  living  of  foreign  countries,  and  we  are 
proposing  to  do  this  for  a  part  of  our  coastwise  shipping  which 
has  now  by  law  the  absolute  protection  of  a  statutory  mo- 
nopoly and  which  needs  no  help. 

Mr.  President,  there  is  but  one  alternative  consistent  with 
self-respect.  We  must  arbitrate  the  interpretation  of  this 
treaty  or  we  must  retire  from  the  position  we  have  taken. 

0  Senators,  consider  for  a  moment  what  it  is  that  we  are 
doing.  We  all  love  our  country;  we  are  all  proud  of  its  his- 
tory; we  are  all  full  of  hope  and  courage  for  its  future;  we 
love  its  good  name;  we  desire  for  it  that  power  among  the 
nations  of  the  earth  which  will  enable  it  to  accomplish  still 
greater  things  for  civilization  than  it  has  accomplished  in  its 
noble  past.  Shall  we  make  ourselves  in  the  minds  of  the  world 
like  unto  the  man  who  in  his  own  community  is  marked  as 
astute  and  cunning  to  get  out  of  his  obligations?  Shall  we 
make  ourselves  like  unto  the  man  who  is  known  to  be  false  to 
his  agreements;  false  to  his  pledged  word?  Shall  we  have  it 
understood  the  whole  world  over  that  "you  must  look  out  for 


238  Speech  of  Elihu  Eoot 

the  United  States  or  she  will  get  the  advantage  of  you";  that 
we  are  clever  and  cunning  to  get  the  better  of  the  other  party 
to  an  agreement,  and  that  at  the  end — 

Mr.  Brandegee.     "Slippery"  would  be  a  better  word. 

Mr.  Root.  Yes;  I  thank  the  Senator  for  the  suggestion — 
"slippery."  Shall  we  in  our  generation  add  to  those  claims  to 
honor  and  respect  that  our  fathers  have  established  for  our 
country  good  cause  that  we  shall  be  considered  slippery? 

It  is  worth  while,  Mr.  President,  to  be  a  citizen  of  a  great 
country,  but  size  alone  is  not  enough  to  make  a  country  great. 
A  country  must  be  great  in  its  ideals ;  it  must  be  great-hearted ; 
it  must  be  noble;  it  must  despise  and  reject  all  smallness  and 
meanness;  it  must  be  faithful  to  its  word;  it  must  keep  the 
faith  of  treaties;  it  must  be  faithful  to  its  mission  of  civiliza- 
tion in  order  that  it  shall  be  truly  great.  It  is  because  we 
believe  that  of  our  country  that  we  are  proud,  aye,  that  the 
alien  with  the  first  step  of  his  foot  upon  our  soil  is  proud  to 
be  a  part  of  this  great  democracy. 

Let  us  put  aside  the  idea  of  small,  petty  advantage;  let  us 
treat  this  situation  and  these  obligations  in  our  relation  to  this 
canal  in  that  large  way  which  befits  a  great  nation. 

Mr.  President,  how  sad  it  would  be  if  we  were  to  dim  the 
splendor  of  that  great  achievement  by  drawing  across  it  the 
mark  of  petty  selfishness;  if  we  were  to  diminish  and  reduce 
for  generations  to  come  the  power  and  influence  of  this  free 
Republic  for  the  uplifting  and  the  progress  of  mankind  by 
destroying  the  respect  of  mankind  for  us !  How  sad  it  would 
be  if  you  and  I,  Senators,  were  to  make  ourselves  responsible 
for  destroying  that  bright  and  inspiring  ideal  which  has  en- 
abled free  America  to  lead  the  world  in  progress  toward  lib- 
erty and  justice! 


Treaty  of  1846  239 


PLATFORM  DECLARATIONS 

DEMOCRATIC   PLATFORM 

We  favor  the  exemption  from  tolls  of  American  ships  en- 
gaged in  coastwise  trade  passing  through  the  Panama  Canal. 
We  also  favor  legislation  forbidding  the  use  of  the  Panama 
Canal  by  ships  owned  or  controlled  by  railroad  carriers  en- 
gaged in  transportation  competitive  with  the  canal. 

This  platform  also  declared  for  upbuilding  the  marine  by 
constitutional  regulation  of  commerce  without  subsidies  or 
bounties. 

PROGRESSIVE  PLATFORM . 

The  Panama  Canal,  built  and  paid  for  by  the  American 
people  must  be  used  primarily  for  their  benefit.  We  demand 
that  the  canal  shall  be  so  operated  as  to  break  transportation 
monopoly,  now  held  and  misused  by  the  transcontinental  rail- 
roads, by  maintaining  sea  competition  with  them;  that  ships 
directly  or  indirectly  owned  or  controlled  by  American  rail- 
road corporations  shall  not  be  permitted  to  use  the  canal,  and 
that  American  ships  engaged  in  the  coasting  trade  shall  pay 
no  tolls. 

The  Republican  platform  did  not  declare  a  policy  but  Presi- 
dent Taft's  views  given  in  his  memorandum  cover  his  policy 
if  elected. 


TREATY  OF  1846 

Between  the  United  States  and  the  Republic  of  New 
Granada 

This  is  a  treaty  of  thirty-six  articles. 

ARTICLE  XXXV 

The  United  States  of  America  and  the  Republic  of  New 
Granada  desiring  to  make  as  durable  as  possible,  the  rela- 
tions which  are  to  be  established  between  the  two  parties  by 


240  Treaty  of  1846 

virtue  of  this  treaty,  have  declared  solemnly  and  do  agree  to 
the  following  points. 

1st.  For  the  better  understanding  of  the  preceding  articles, 
it  is,  and  has  been  stipulated,  between  the  high  contracting 
parties,  that  the  citizens,  vessels  and  merchandise  of  the  United 
States  shall  enjoy  in  the  parts  of  New  Granada,  including  those 
of  the  part  of  the  Granadian  territory  generally  denominated 
Isthmus  of  Panama  ...  all  the  exemptions,  privileges  and 
immunities,  which  are  now  or  which  may  hereafter  be  enjoyed 
by  Granadian  citizens,  their  vessels  and  merchandise;  and 
that  this  equality  of  favors  shall  be  made  to  extend  to  the  pas- 
sengers, correspondence  and  merchandise  of  the  United  States 
in  their  transit  across  the  said  territory,  from  one  sea  to  the 
other. 

The  Government  of  New  Granada  guarantees  to  the  Govern- 
ment of  the  United  States  that  the  right  of  way  or  transit 
across  the  Isthmus  of  Panama  upon  any  modes  of  communi- 
cation that  now  exist,  or  that  may  be  hereafter  constructed 
shall  be  open  and  free  to  the  Government  and  citizens  of  the 
United  States  and  for  the  transportation  of  any  articles  of 
produce,  manufactures  or  merchandise,  of  lawful  commerce 
belonging  to  the  citizens  of  the  United  States;  that  no  other 
tolls  or  charges  shall  be  levied  or  collected  upon  the  citizens 
of  the  United  States,  or  their  said  merchandise  thus  passing 
over  any  road  or  canal  that  may  be  made  by  the  Government 
of  New  Granada,  or  by  the  authority  of  the  same,  than  is 
under  like  circumstances,  levied  upon  and  collected  from  the 
Granadian  citizens;  that  any  lawful  produce,  manufactures  or 
merchandise  belonging  to  citizens  of  the  United  States,  thus 
passing  from  one  sea  to  the  other,  in  either  direction  for  the 
purpose  of  exportation  to  any  foreign  country,  shall  not  be 
liable  to  any  import  duties  whatever;  or  having  paid  said 
duties  they  shall  be  entitled  to  draw  back,  upon  their  exporta- 
tion; nor  shall  the  citizens  of  the  United  States  be  liable  to 
any  duty,  tolls,  or  charges  of  any  kind  to  which  native  citizens 
are  not  subjected  for  thus  passing  the  said  Isthmus. 


President  Wilson's  Message         241 

And  in  order  to  secure  to  themselves  the  tranquil  and  con- 
stant enjoyment  of  these  advantages  and  for  the  favors  they 
have  acquired  by  the  4th,  5th  and  6th  articles  of  this  treaty, 
the  United  States  guarantees  positively  and  efficaciously  to 
New  Granada,  by  the  present  stipulation,  the  perfect  neutral- 
ity of  the  beforementioned  Isthmus  with  the  view  that  the  free 
transit  from  the  one  to  the  other  sea  may  not  be  interrupted 
or  embarrassed  in  any  future  time  while  this  treaty  exists 
and  in  consequence  the  United  States  also  guarantee,  in  the 
same  manner,  the  rights  of  sovereignty  and  property  which 
New  Granada  has  and  possesses  over  said  territory.  .  .  . 

Articles  4,  5  and  6  provide  for  relief  from  discriminating 
duties  on  tonnage  or  cargo — which  had  nearly  destroyed  U.  S. 
trade  with  New  Granada. 


PRESIDENT  WILSON'S  MESSAGE 

Gentlemen  of  the  Congress — "I  have  come  to  you  upon 
an  errand  which  can  be  very  briefly  performed,  but  I  beg 
that  you  will  not  measure  its  importance  by  the  number  of 
sentences  in  which  I  state  it.  No  communication  I  have  ex- 
pressed to  the  Congress  carried  with  it  graver  or  more  far- 
reaching  implications  to  the  interests  of  the  country,  and  I 
come  now  to  speak  upon  a  matter  with  regard  to  which  I  am 
charged  in  a  peculiar  degree,  by  the  Constitution  itself,  with 
personal  responsibility. 

I  have  come  to  ask  for  the  repeal  of  that  provision  of  the 
Panama  Canal  Act  of  August  24,  1912,  which  exempts  vessels 
of  the  coastwise  trade  of  the  United  States  from  the  payment 
of  tolls,  and  to  urge  upon  you  the  justice,  the  wisdom  and  the 
large  policy  of  such  a  repeal  with  the  utmost  earnestness  of 
which  I  am  capable. 

In  my  judgment  very  fully  considered  and  maturely  formed, 
that  exemption  constitutes  a  mistaken  economic  policy  from 
every  point  of  view,  and  is  moreover,  in  plain  contravention 
of  the  treaty  with  Great  Britain  concerning  the  Canal,  con- 


242  Panama  Canal  Act,  1912 

eluded  on  November  18,  1901.  But  I  have  not  come  to  urge 
my  personal  views.  I  have  come  to  state  to  you  a  fact  and  a 
situation.  'Whatever  may  be  our  own  differences  of  opinion 
concerning  this  much  debated  measure,  its  meaning  is  not 
debated  out  of  the  United  States.  Everywhere  else  the  lan- 
guage of  the  treaty  is  given  but  one  interpretation,  and  that 
interpretation  precludes  the  exemption  I  am  asking  you  to  re- 
peal. We  consented  to  the  treaty;  its  language  we  accepted, 
if  we  did  not  originate  it;  and  we  are  too  big,  too  powerful, 
too  self-respecting  a  nation  to  interpret  with  too  strained 
or  refined  a  reading  the  words  of  our  own  promises  just  be- 
cause we  have  the  power  enough  to  give  us  leave  to  read 
them  as  we  please. 

The  large  thing  to  do  is  the  only  thing  we  can  afford  to 
do,  a  voluntary  withdrawal  from  a  position  everywhere  ques- 
tioned and  misunderstood.  We  ought  to  reverse  our  action 
without  raising  the  question  whether  we  are  right  or  wrong, 
and  so  once  more  deserve  our  reputation  for  generosity  and 
the  redemption  of  every  obligation  without  quibble  or  hesita- 
tion. I 

I  ask  you  this  in  support  of  the  foreign  policy  of  the  ad- 
ministration. I  shall  not  know  how  to  deal  with  other  mat- 
ters of  even  greater  delicacy  and  nearer  consequence,  if  you 
do  not  grant  it  to  me  in  ungrudging  measure." 


PANAMA  CANAL  ACT,  1912 

Section  5.  That  the  President  is  hereby  authorized  to  pre- 
scribe and  from  time  to  time  change  the  tolls  that  shall  be 
levied  by  the  Government  of  the  United  States  for  the  use  of 
the  Panama  Canal.  ...  No  tolls  shall  be  levied  upon  ves- 
sels engaged  in  the  coastwise  trade  of  the  United  States. 
That  section  forty-one  hundred  and  thirty-two  of  the  Re- 
vised Statutes  is  hereby  amended  to  read  as  follows:  Tolls 
may  be  based  upon  gross  or  net  registered  tonnage.  .  .  . 
When  based  on  net  registered  tonnage  the  tolls  shall  not  ex- 


Panama  Canal  Act,  1912  243 

ceed  one  dollar  and  twenty-five  cents  per  net  registered  ton, 
nor  be  less,  other  than  for  vessels  of  the  United  States  and 
its  citizens,  than  the  estimated  proportionate  cost  of  the  actual 
maintenance  and  operation  of  the  canal. 


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